New Directions in Elite Studies 2017037577, 9781138059191, 9781315163796

Table of contents :
Cover
Title
Copyright
Contents
Acknowledgements
1 Introduction
Section 1 The myth of a global business elite
2 The international business elite: fact or fiction?
3 Degrees of transnationalization: the case of the Dutch business elite
4 Dynamics of internationalization: a sequential analysis of the careers of Swiss banking elites
Section 2 Scrutinizing the power elite and the field of power
5 A place at what table? An analysis of symbolic capital hierarchies at the annual dinner of Norges Bank (the Norwegian central bank)
6 The gendered reproduction of the upper class
7 A Scandinavian variety of power elites? Key institutional orders in Danish elite networks
8 The anatomy of the British economic “elite”
Section 3 Social closure and reproduction strategies
9 The social history of a capitalist class: wealth holders in Stockholm, 1914–2006
10 Beyond meritocracy: wealth accumulation in the German upper classes
11 Gendering the elites: an ethnographic approach to elite women’s lives and the reproduction of inequality
Section 4 Elite education, recruitment and legitimacy
12 The elite placement power of professors of law and economic sciences
13 Elite . . . but not that elite: envisioning elite status at a second-rank grande école
14 Boundary work: power and liminality in management consulting
15 Theorizing elites in unequal times: class, constellation and accumulation
Index

Citation preview

New Directions in Elite Studies

Since the financial crisis, the issue of the “one percent” has become the centre of intense public debate, unavoidable even for members of the elite themselves. Moreover, inquiring into elites has taken centre stage once again in both journalistic investigations and academic research. New Directions in Elite Studies attempts to move the social scientific study of elites beyond economic analysis, which has greatly improved our knowledge of inequality, but is restricted to income and wealth. In contrast, this book mobilizes a broad scope of research methods to uncover the social composition of the power elite – the “field of power”. It reconstructs processes through which people gain access to positions in this particular social space, examines the various forms of capital they mobilize in the process – economic, but also cultural and social capital – and probes changes over time and variations across national contexts. Bringing together the most advanced research into elites by a European and multidisciplinary group of scholars, this book presents an agenda for the future study of elites. It will appeal to all those interested in the study of elites, inequality, class, power and gender inequality. Olav Korsnes is Professor of Sociology at the University of Bergen, Norway. Johan Heilbron is a historical sociologist and Director of Research at the Centre Européen de Sociologie et de Science Politique de la Sorbonne (CESSP-CNRS-EHESS) in Paris, France. Johs. Hjellbrekke is Professor of Sociology at the University of Bergen, Norway, and Director of the Norwegian University Centre in Paris, France. Felix Bühlmann is Assistant Professor of Life Course Sociology at the University of Lausanne, Switzerland. Mike Savage is Martin White Professor of Sociology and co-Director of the International Inequalities Institute, LSE, UK.

Routledge Advances in Sociology For a full list of titles in this series, please visit www.routledge.com/series/ SE0511

232  Mass Shootings in Comparative Perspective Communities and Shared Experiences in the Aftermath Johanna Nurmi 233  Mega-Events as Economies of the Imagination Creating Atmospheres for Rio 2016 and Tokyo 2020 Rodanthi Tzanelli 234  Senses in Cities Experiences of Urban Settings Edited by Kelvin E.Y. Low and Devorah Kalekin-Fishman 235  Shared Housing, Shared Lives Everyday Experiences Across the Lifecourse Sue Heath, Katherine Davies, Gemma Edwards and Rachael M Scicluna 236  ‘Helicopter Parenting’ and ‘Boomerang Children’ How Parents Support and Relate to Their Student and Co-Resident Graduate Children Anne West and Jane Lewis 237  New Directions in Elite Studies Edited by Olav Korsnes, Johan Heilbron, Johs. Hjellbrekke, Felix Bühlmann and Mike Savage 238  Reflections on Knowledge, Learning and Social Movements History’s Schools Edited by Aziz Choudry and Salim Vally 239  Social Generativity A relational paradigm for social change Edited by Mauro Magatti 240  The Live Art of Sociology Cath Lambert

New Directions in Elite Studies Edited by Olav Korsnes, Johan Heilbron, Johs. Hjellbrekke, Felix Bühlmann and Mike Savage

First published 2018 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 711 Third Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2018 selection and editorial matter, Olav Korsnes, Johan Heilbron, Johs. Hjellbrekke, Felix Bühlmann and Mike Savage; individual chapters, the contributors The right of Olav Korsnes, Johan Heilbron, Johs. Hjellbrekke, Felix Bühlmann and Mike Savage to be identified as the authors of the editorial material, and of the authors for their individual chapters, has been asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data Names: Korsnes, Olav, editor. Title: New directions in elite studies / [edited by] Olav Korsnes [and four others]. Description: Abingdon, Oxon ; New York, NY : Routledge, 2018. | Series: Routledge advances in sociology ; 237 | Includes bibliographical references and index. Identifiers: LCCN 2017037577 | ISBN 9781138059191 (hardback) Subjects: LCSH: Elite (Social sciences) | Social classes. | Power (Social sciences) Classification: LCC HM1263 .N49 2018 | DDC 305.5—dc23 LC record available at https://lccn.loc.gov/2017037577 ISBN: 978-1-138-05919-1 (hbk) ISBN: 978-1-315-16379-6 (ebk) Typeset in Baskerville by Apex CoVantage, LLC

Contents

Acknowledgements  1 Introduction

vii 1

JOHAN HEILBRON, FELIX BÜHLMANN, JOHS. HJELLBREKKE, OLAV KORSNES AND MIKE SAVAGE

SECTION 1

The myth of a global business elite

29

  2 The international business elite: fact or fiction?

31

MICHAEL HARTMANN

  3 Degrees of transnationalization: the case of the Dutch business elite

46

ROB TIMANS AND JOHAN HEILBRON

  4 Dynamics of internationalization: a sequential analysis of the careers of Swiss banking elites

73

PEDRO ARAUJO

SECTION 2

Scrutinizing the power elite and the field of power

91

  5 A place at what table? An analysis of symbolic capital hierarchies at the annual dinner of Norges Bank (the Norwegian central bank)

93

JOHS. HJELLBREKKE AND OLAV KORSNES

  6 The gendered reproduction of the upper class MAREN TOFT AND MAGNE FLEMMEN

113

vi Contents   7 A Scandinavian variety of power elites? Key institutional orders in Danish elite networks

133

ANTON GRAU LARSEN AND CHRISTOPH HOUMAN ELLERSGAARD

  8 The anatomy of the British economic “elite”

150

MIKE SAVAGE, KATHARINA HECHT, JOHS. HJELLBREKKE, NIALL CUNNINGHAM AND DANIEL LAURISON

SECTION 3

Social closure and reproduction strategies

175

  9 The social history of a capitalist class: wealth holders in Stockholm, 1914–2006

177

MARTIN GUSTAVSSON AND ANDREAS MELLDAHL

10 Beyond meritocracy: wealth accumulation in the German upper classes

198

NORA WAITKUS AND OLAF GROH-SAMBERG

11 Gendering the elites: an ethnographic approach to elite women’s lives and the reproduction of inequality

227

LUNA GLUCKSBERG

SECTION 4

Elite education, recruitment and legitimacy

245

12 The elite placement power of professors of law and economic sciences

247

FELIX BÜHLMANN, THIERRY ROSSIER AND PIERRE BENZ

13 Elite . . . but not that elite: envisioning elite status at a second-rank grande école265 UGO LOZACH

14 Boundary work: power and liminality in management consulting

280

FELIX STEIN

15 Theorizing elites in unequal times: class, constellation and accumulation

297

MIKE SAVAGE AND GEORGIA NICHOLS

Index

316

Acknowledgements

This book results from the conference “Changing Elites in Europe” at LSE, London in November 2015, arranged in cooperation between the Department of Sociology at LSE and the Department of Sociology at the University of Bergen, Norway. We want to thank both departments for their assistance in organizing the conference. The conference and the editing of the book was sponsored by the research project “New directions in studies of social differentiation, power, class, status and elite”, financed by the Norwegian Research Council, hosted by the University of Bergen, and directed by professor Olav Korsnes at the Department of Sociology. This made it possible to receive excellent language editing assistance and professional advice from Richard Nice, and very competent assistance from Rob Timans in the editing of tables, figures and the index of the book. We are very grateful for their effort to improve the quality of the book. We also want to thank Emily Briggs for supporting the initial idea of the book and its development, and Elena Chiu for guiding us competently through the final stages of the production process.

1 Introduction Johan Heilbron, Felix Bühlmann, Johs. Hjellbrekke, Olav Korsnes and Mike Savage

The renewed attention given to “elites” is perhaps the most salient consequence of the financial crisis (2007–2009) and the Great Recession that followed it. Economic and political reform has been remarkably timid, but concern about the privilege and power of elites is far more widespread today than it has been for decades. While the Occupy Wall Street movement presented itself as an essentially diverse and consciously leaderless movement, criticism of elite privilege was its common denominator: “The one thing we all have in common is that we are the 99 percent that will no longer tolerate the greed and corruption of the 1 percent.” Although the initial appeal of the movement has not been matched by its actual impact, the issue of the “one percent” has become the centre of intense public debate, unavoidable even for members of the elite themselves. One illustration among many is that in the primaries for the 2016 presidential election in the US, both the New York billionaire Donald Trump and the veteran politician Bernie Sanders presented themselves as anti-elite candidates. No longer merely a specialized “backwater” (Froud et al. 2006; Savage and Williams 2008), inquiring into elites has taken centre stage in journalistic investigations as well as in academic research. Elites and elite rule are obviously anything but new topics, whether in public debate or in the social sciences. There is a long democratic tradition of scrutinizing the high and the mighty. In industrializing nations, this was particularly related to the rise of entrepreneurs and corporate executives as the core of a new class and the source of unprecedented inequality. In the political realm, recurrent debates have centred on the issue of a small, selective and interconnected group that in democratic regimes continues to exercise power over the vast majority of the population. In this introduction we will first present a brief outline of how the attention to and the study of elites have evolved. We will then address the current state of elite research and present the approaches which underlie the various contributions in this book. In the last part, we will present the structure of the book and the individual chapters.

2  Johan Heilbron et al.

The demise of elite studies While there is no lack of historical antecedents for the current debate, during the latter part of the twentieth century the interest in elites declined. One of the reasons for this demise was shifts in the relations between capital and labour, and between rulers and ruled. After the First World War, the stock market crash of 1929 and the collective mobilization during the Second World War, economic inequalities in most western countries diminished (Wilterdink 1995, 2000; Piketty 2014). Piketty explains this relatively unusual historical pattern (r < g) by invoking external “shocks” (wars, the Great Depression) which led to more progressive taxation and policies such as the New Deal (see also Scheidel 2017). Sociologists have pointed to mechanisms that, although related to these major shocks, have their own specific social dynamics, notably the changing interdependencies between upper and lower groups or classes. Mobilization for war, for example, increases the dependency of elites on the working classes, and enables class compromises such as more progressive tax regimes and redistribution in the form of welfare arrangements. Globalization, on the other hand, diminishes the dependency of national economic elites on the working classes and their organizations, thus contributing to growing inequality (Wilterdink 1995, 2000). The intermediary mechanism between major shocks and redistribution policies is elite perception of the lower classes (De Swaan 2005). Elites can perceive the working classes as an indispensable ally (to fight wars, as a labour force, or as consumers), but also as a threat to their own health (e.g. epidemics) or safety in the event of major upheavals. Both can have the effect that elites are prepared to support public institutions (public sanitation, schooling, health care) and other welfare arrangements (De Swaan 1988). The high level of economic growth during the three decades after 1945, the trente glorieuses, a period of less stable economic inequalities, was, furthermore, accompanied by the so-called “managerial revolution” in business and by expanding social programmes and welfare arrangements. In the context of the Cold War and geopolitical rivalries between communist and capitalist states, inequalities were addressed by focusing on piecemeal remedies, both in welfare policy and in the management of personnel in private firms. The workings of the power elite, at the other end of the social hierarchy, however, were discreetly hidden from the public eye, and public scrutiny of the privileged few was rare. Portrayals of the rich and powerful typically took the form of celebrity stories of personal success and occasional failure, rather than muckraking revelations about domineering tycoons such as investigative journalists had written about the “robber barons” of the late nineteenth and early twentieth centuries. While research in the social sciences followed a partly independent trajectory, it displayed a similar pattern of diminishing attention towards elites. Upon entering the university at the end of the nineteenth century,

Introduction  3 the social sciences became institutionalized as academic disciplines (Porter and Ross 2003). Based on a stricter division of labour in the study of economic, political and social questions, and driven by an academic ethos that generally opposed radical reform, many pioneers of academic social science conceived of their work as an alternative to Marxism. The classical elite theorists (Mosca, Pareto, Michels), for example, explicitly rejected the Marxist analysis of domination, and dismissed the idea of a classless society as a utopian chimera. Inequality and minority rule, they argued, are inevitable features of human society. The ruling class, according to Mosca, derives its superiority not from ownership of the means of production and exploitation, but from the fact that it is an organized minority. Membership of this selective group is not hereditary but circulates, Pareto insisted, even if organizations remain subject to what Michels dubbed the “iron law of oligarchy” (see Bottomore 1964/1993; Savage and Williams 2008; Hartmann 2007; Khan 2012). This view of elite rule, which was discredited by Pareto and Michels’ association with fascism, gave way to predominantly functionalist and pluralist accounts of power after 1945 due to the dominance of American social science with its reliance on versions of modernization theory (Backhouse and Fontaine 2010; Heyck 2015; Khan 2012). In sociology, Weberian and Marxian ideas of social closure and domination were replaced by the analytical framework of a functionally differentiated social system. Talcott Parsons’ plurality of subsystems, each with its own social function, was at odds with the idea of a dominant class or a ruling elite. Social relations, furthermore, were primarily researched through large-scale surveys of mobility and stratification, which excluded any detailed attention to the upper layers of society (Froud et al. 2006; Savage and Williams 2008). In a similar fashion, “pluralism” became the dominant view in political science. In this perspective rivalry for the support of voters through elections avoids monopolization of power, assures open competition between different groups, and establishes a balanced, “polyarchical” power structure, as Robert Dahl termed it in his classic Who Governs? (1961). The most important work during this long period of relative neglect was done outside of the mainstream of academic social science. While there have been heterodox figures and currents in all disciplines, the most prominent author was in all likelihood the American sociologist C. Wright Mills. His book The Power Elite (1956) was a provocative restatement of elite theory and a challenging antidote to the dominant approaches of behaviouralism, functionalism and pluralism. Mills depicted the United States as a country ruled by a “power elite” whose decisions affected all layers of society. Consisting of top executives, high military men and elite politicians, the three groups actually constituted an interdependent and interlocking group at the apex of the power hierarchy. At the middle level of the power structure Mills located members of Congress, the administration and regional interest groups. Below the elite and the middle levels he situated the powerless masses, who are dependent on the decisions of the power elite and suffer

4  Johan Heilbron et al. their consequences, while being distracted from organized opposition by the entertainment industry. Although directly concerned with the capitalist economy, academic economists have gone furthest in marginalizing the issue of power differentials and elite privilege. Until quite recently inequalities in exchange processes were considered analytically irrelevant for the leading economic models. It was precisely the virtue of competitive markets that individual differences in talent and effort would be rewarded, whereas privilege of caste or class would not. Redistribution of market outcomes is in this view an ethical and political, not an economic, problem. Questions of elite and class formation fell outside the standard repertoire of academic economics; they still hardly ever appear in economic textbooks. Economists have, as Schumpeter noted, at least since John Stuart Mill seen nations as “amorphous agglomerations of individuals.” Social classes were not seen as “living and fighting entities but as mere labels affixed to economic functions (or functional categories)” (Schumpeter 1954: 886). Although classically focused on production, production factors and their allocation through markets, some economists, Simon Kuznets in particular, did study the distribution of income and wealth empirically, but this was largely considered an applied branch of the discipline with little significance for the predominant classical and neo-classical models. There is, moreover, a longstanding suspicion in economics towards even raising such questions. The Chicago economist Robert Lucas, winner of the 1995 Bank of Sweden Prize for economic sciences in honour of Alfred Nobel, infamously stated in 2004 that tackling these issues is detrimental to the discipline: Of the tendencies that are harmful to sound economics, the most seductive, and in my opinion the most poisonous, is to focus on questions of distribution. . . . The potential for improving the lives of poor people by finding different ways of distributing current production is nothing compared to the apparently limitless potential of increasing production. (Lucas 2004: 8) It is against this usually implicit stance that, following the lead of Anthony Atkinson, Thomas Piketty has urged that distribution be put at the very centre of economic analysis (Piketty 2015). Although the social sciences expanded enormously after World War II, a major reason for the peripheral status of elite studies was that funding went to issues that decision makers considered relevant for managing the behaviour of individuals, organizations and systems (Heyck 2015). Much work was done on the lower and middle layers of the social hierarchy, but rarely if ever was substantive funding provided for studying the highest echelons of society. The main exception, one which neatly confirms the rule,

Introduction  5 was studies of “leadership” in business schools and management education (Khurana 2007).

The resurgence of elite studies after 1968 Although the renaissance of elite studies is more recent, its roots may be traced back to the double crisis of the post-war settlement that manifested itself during the 1970s. The first crisis, associated with the civil rights movement, opposition to the Vietnam War, the New Left and the counter-culture of 1960s, spread quickly and widely after 1968. Representing a cultural, social and political but not economic crisis, it was carried by members of the post-war baby boom who revolted against the “establishment.” University students contested both professorial power and the dominant practices in established disciplines, and in the years around 1968 and after, critical thinking (Marxism, critical theory, psychoanalysis) was rediscovered, revived and reinforced by radical perspectives related to the women’s movement, third world activism and minority groups such as blacks and gays. Issues of power and power structures were central to all of these perspectives. In sociology and political science William Domhoff’s Who Rules America? (1967) was an early and widely read example. Even so, whereas Domhoff’s ambition was to identify those found at the top of the power structure of American society, in the 1970s and 1980s, elite studies within political science would often be both more narrow and sectorial in their focus. More importantly, they drew inspiration more directly from the Italian school, i.e. the works of Mosca, Pareto and Michels, and from functionalist traditions in sociology. In the comparative studies of G. Lowell Field and John Higley (e.g. Field and Higley 1980; Higley and Burton 2006), the existence of a consensually unified elite is also taken to be a precondition for a stable, liberal democracy. For these authors, liberal democracy is not only created and sustained by, but actually depends on, this elite. Furthermore, if we are to believe Higley, for this “enlightened oligarchy” to be able do its job, i.e. govern society, a high degree of social mobility into the elites, and close ties between the elites and non-elites, might actually become a problem also in present-day post-industrial societies: “[W]hat may happen if it is not possible to assuage non-elites? Presumably, actions and measures ranging from deception to discouragement to outright repression will be more reviled by non-elites and harder for elites to take” (Higley 2008). The question of unity or disunity and of whether there is one ruling class or several, competing ruling class fractions was also at the core of Erwin Scheuch’s (e.g. Scheuch 2003) historically oriented studies of the German elite, and of Pierre Birnbaum’s studies of the composition of and recruitment to the French higher civil service. Focusing on the centrality of the educational system, and in particular the École Nationale d’Administration and the grand corps, Birnbaum concluded that the French ruling class was becoming more homogenous, the state less independent, and that the

6  Johan Heilbron et al. general trend was in the direction of “a new and broader unification of politico-administrative and economic powers” (Birnbaum 1981: 140). Similar sectorial studies, based on positional criteria for identifying the elites and also critical of Mills’ original thesis, were done by Suleiman (e.g. Suleiman 1997) and Dogan (2003), and more recently by Genieys (2010). Some of the emerging research has used new tools like social network analysis to identify power structures. Research on interlocking directorates (links between corporations through individuals who sit on two or more corporate boards) revived the study of corporate elites (Mizruchi 1996; Freeman 2004; Timans 2015; Fennema and Heemskerk 2016). In anthropology, in which little attention had been paid to elites, pleas for what Laura Nader called “studying up” (Nader 1969) stimulated attention to power relations, and eventually informed a wide array of ethnographic accounts of elite groups, cultures and institutions (Shore and Nugent 2002; Abbink and Salverda 2013; Strycker and Gonzalez 2014; Carrier and Kalb 2015). In economics, Marx was debated again and dissenting movements appeared. “Radical economics” emerged after the 1968 meeting of the American Economic Association; in France, the so-called regulation school developed (Boyer and Saillard 2002). Although the last quarter of the twentieth century saw a strong homogenization of mainstream economic thinking (Backhouse 2002: 313), critical progress in historical and empirical analysis of economic inequality was pioneered by Anthony Atkinson in Britain, who was the leading example for the work of Piketty and several other economists. In the resurgence of elite studies, the French social scientist Pierre Bourdieu occupies a crucial position. Bourdieu, who was trained in philosophy, did anthropological fieldwork in Algeria, and undertook a great variety of empirical studies, developed a distinct and increasingly influential approach to issues of power and elite formation. Starting in the 1960s he conceptualized the question of power relations by enlarging and differentiating the notion of capital, insisting on the particular importance of cultural, social and symbolic capital (Bourdieu 1986). The differentiation of resources led Bourdieu in his classic Distinction (or. 1979/tr. 1984) to a three-dimensional analysis of social space and social classes. Positions in social space are based on the overall amount of the capital agents possess, on the composition of their capital (more economic but less cultural capital, or the other way around), and on their social trajectory. Mapping social practices and taste shows that they are homologous with the multidimensional social structure conceptualized in this manner (for recent work see Coulangeon and Duval 2014). The way in which agents accumulate their resources, according to Bourdieu, is guided not by rational calculation, as economists assume, but by dispositions that are socially inherited and acquired. These dispositions have various dimensions, they are class- as well as gender-specific, and in advanced societies they are organized in a variety of relatively autonomous fields. Fields are domains of struggle over specific stakes, and are

Introduction  7 characterized by the unequal distribution of resources and by resulting relations of power and domination. Bourdieu thus dissected field-specific power structures in, among others, the religious, cultural, economic and academic fields (for an introductory overview, see Bourdieu and Wacquant 1992). At the same time, he conceptualized the power structure of the social space as a whole. What Marx conceived as the “ruling class” and Mills as the “power elite” was relocated by Bourdieu in a specific social universe: the field of power. In this particular social space agents and institutions with a sufficient amount of capital to occupy dominant positions in their field of origin (the economic, political, academic fields, etc.) confront one another for the imposition of the “dominant principle of domination.” For the French case, Bourdieu demonstrated that a homology exists between the field of power and the field of the elite schools, the grandes écoles (Bourdieu 1996). To map field structures Bourdieu used particular statistical methods, (multiple) correspondence analysis, or MCA (Le Roux and Rouanet 2010; Lebaron and Leroux 2015), which he considered particularly well suited for analysing social relations, but which are not well known outside of France. In the dominating regression-based tradition that Andrew Abbott (2004) has labelled “Standard Causal Analysis” (SCA), the primary goal is to isolate the effects each of the “independent” variables has on a “dependent” variable. In an MCA, the focus is instead on uncovering the latent relations between variables and between their categories, and to summarize these structures geometrically. In geometric data analysis (GDA) the emphasis is also on analysing and visualizing individuals’ dispersion and concentration, most often presented in one or more factorial planes (Le Roux and Rouanet 2004).

Neoliberalism and the rise of inequalities But the resurgence of elite studies cannot be understood merely as an effect of the intellectual and political turmoil after 1968. At the very moment when critical, anti-establishment radicalism was spreading, a second, quite different crisis unfolded. Monetary instabilities, caused by the collapse of the Bretton Woods system in 1971, were followed by the first oil crisis (1973), successive years of “stagflation,” and a second oil crisis in 1979. Around 1980 they culminated in the deepest international recession since World War Two. The conjunction of both crises, which had evolved independently from one another, provoked intense controversy about the need for fundamental changes. Eventually these debates were settled in favour of neoliberalism. Margaret Thatcher was elected in Britain in 1979, Ronald Reagan became President of the US in 1980, and sooner or later and to varying degrees, neoliberal policies were implemented in virtually all western countries (Harvey 2005; Prasad 2006). Rather than increasing government spending, budgets were reduced, taxes lowered, welfare benefits cut, and the power of trade unions restricted. At the same time public firms and

8  Johan Heilbron et al. services were privatized and markets deregulated. When in 1989 the Berlin Wall fell and communist regimes in Eastern Europe collapsed, neoliberal forces gained further ground. For decades then, roughly since the international recession around 1980 neoliberalism dominated the policy agenda of western and many other countries. In addition to the spread of critical movements after 1968, the rising inequalities that resulted from neoliberal policies represent the second major factor that shaped the current wave of elite studies. While neoliberalism is commonly seen as pertaining to government and public policy, it is essential, however, to include the changes that simultaneously transformed large firms and their policies (Fligstein 1990, 2001). Only by taking large corporations and the transformation of the economic field into account is it possible to explain the explosion of executive pay, which was the major component of growing economic inequality. After decades of high and stable growth, North American firms in particular saw their profitability decline in the 1970s due to growing competition from Japanese and European competitors and to the combined effect of slow growth and high inflation. American corporations lost market share in a number of industries (cars, consumer electronics), and high inflation led investors away from company stocks to government bonds, causing share prices to fall even further. The initial response to the difficulties was defensive: managers cut costs, attempted to enhance efficiency, and tried to obtain state support through subsidies, tax advantages and protective measures. When the crisis turned out to be longer lasting and deeper than previous recessions, calls for structural reform came to the fore. The business strategy that eventually triumphed over all others was that corporations should henceforth be managed for the purpose of creating “shareholder value” (Fligstein 1990, 2001). The predominant business conception after World War Two had basically relied on managing trade-offs between different stakeholders. Shareholder value, by contrast, required corporate executives to act in the interests of the shareholders, and of shareholders only. The idea of “maximizing shareholder value,” which emerged around 1980, spread through the economic field in the US during the 1980s, and somewhat later also to Europe (Lazonick and O’Sullivan 2000; Krippner 2005; Heilbron et al. 2014). Although executives initially resisted the focus on shareholder value, a wave of “hostile” takeovers, together with other forms of pressure from activist shareholders, forced management to adapt to the new balance of power (Useem 1993). The decisive factor in this change was the unprecedented force of institutional investors (pension funds, mutual funds and the like) (Useem 1996; Heilbron 2005). In the US these investors organized themselves in the Council of Institutional Investors (founded 1985), which collectively promoted the doctrine of shareholder value. As a result the “retain-and-reinvest” strategy that large corporations had previously followed made way for a “downsize-and-distribute” strategy (Lazonick 2016). Instead of retaining an increasing proportion of profits for

Introduction  9 investments, which would ensure future profits, firms were down-sized and a growing proportion of the profits was distributed to shareholders, either directly (dividends) or indirectly (share buybacks). Because managers quickly found lucrative ways to adjust to the newly acquired power of shareholders, for which they were lavishly rewarded by higher salaries and compensation packages that now included a variety of share, option and bonus plans (Frydman and Saks 2010), inequalities within firms exploded. In 1965 American CEOs made more than 40 times the average factory worker’s wage; three decades later it had risen to over 400 times (O’Sullivan 2000: 200). Although Piketty notes that 60 to 70 percent of the highest income group (the 0.1 percent) are corporate executives (Piketty 2014: 302), he does not connect the rise in executive pay to the shareholder revolution of the 1980s. First in the US and gradually also in other western countries a shift occurred from post-war managerial capitalism to a highly financialized shareholder capitalism (Useem 1996; Fligstein 2001; Van der Zwan 2014). The strong increase in disparities of income and wealth that has been documented especially for the US (Wilterdink 1995, 2000; Atkinson and Piketty 2007, 2010; Atkinson et al. 2011) was in all likelihood the joint effect of neoliberal public policies on the one hand and the new shareholder value tactics of large firms on the other (Heilbron 2005; Jung and Dobbin 2012). Since the 1980s, in any case, especially the US shows a clear pattern of social and economic polarization. The position of employees has stagnated or deteriorated, with diminishing career jobs, declining job security and union membership, and a growing contingent of precarious workers (parttime, temporary and contract workers) (Hacker 2006). Employee benefits (health insurance, pension plans) were reduced and in some cases abolished, thus increasingly shifting risk and responsibility from employers to employees (Ghilarducci 2008; Hacker 2006; Soss et al. 2007). At the highest level of the corporate labour force the opposite happened. Higher management and high-end consultants and service providers to the corporate elite improved their position. Within the privileged few (the 0.1 percent) corporate executives form the largest group, but within this group the financial elite (investment bankers, private equity firms, hedge funds) profited even more. The 25 best paid hedge fund managers in the US, for example, received more income every year between 2004 and 2012 than all of the chief executives of the Standard and Poor’s 500 companies combined. By 2012 their average yearly income had risen to $537 million (Kaplan and Rauh 2013). It is against the background of this economic and social polarization, which was not restricted to the US, that issues of elite privilege and elite power have re-emerged in public debate as much as in academic research. The most visible effect of the shift in public perception is no doubt the surge of “populism.” Much of the ambiguity of populist discourse about elites, oscillating between fascination and resentment, was expressed in the 2016 election of Donald Trump to the presidency of the US and the British

10  Johan Heilbron et al. vote to leave the European Union in the same year. In both cases anti-elite rhetoric mobilized unexpectedly large constituencies. But discontent with the political “establishment” and other parts of the “elite” had been increasing for quite some time. In Europe, right-wing populism emerged during the 1970s and 1980s (the French Front National was founded in 1972); in 1994 Silvio Berlusconi came to power in Italy; in 2005 the French and Dutch populations expressed their discontent by voting against the European constitution. Although the financial crisis (2007–2009) and the Great Recession did not create anti-elite sentiment, they have undoubtedly reinforced it considerably.

New elite studies In the research that has renewed the study of inequality and elites, some of the most distinctive work has been done by economists. It is perhaps not entirely accidental that Simon Kuznets’ pioneering Shares of Upper Income Groups in Income and Savings (1953) was mainly taken up by European economists. From the 1970s onwards the British economist Anthony Atkinson was the leading international expert on measuring and comparing economic inequality. Piketty’s earlier work on France (2001) built on Atkinson’s work, and together with Emmanuel Saez and some of their students, they jointly created the World Wealth and Income Database (WID) in 2011. By using tax data about the share of upper income and wealth groups, they produced far more refined analyses of economic inequality than was possible by relying on other economic indicators (Gini-coefficient, Theil index). Focused on income and wealth distribution, the analyses have been extended to many more countries and tend to include other types of data as well – tax regimes and tax evasion among them (Zucman 2015). Important work by other economists, like Stiglitz (2012, 2015), Bourguignon (2014) and Milanovic (2016), demonstrates that inequality has finally become a highly significant research area in economics as well. While much of this work derives from rigorous measurement and data analysis, it has also obtained a public visibility and civic engagement that is quite rare in the social sciences. Several of the most vigorous scholars (Milanovic, Piketty, Stiglitz) have lobbied for political reforms to reduce the most excessive forms of inequality. This was also the topic of Atkinson’s last book (he died in 2017): Inequality: What can be done? (2015). The most remarkable contribution to the debate is no doubt Thomas Piketty’s Capital in the Twenty-First Century (2014), which has been translated into 35 languages and was a widely discussed and unlikely bestseller. But however path-breaking and prominent these economic analyses of inequality have been, several other strands of research are no less significant. Since this body of work is less known and very diverse, it can perhaps conveniently be related to: a) new data bases, b) new methods), and c) new topics:

Introduction  11 a) New data bases Elites are a group on which data is notoriously hard to find. Like other groups, such as ethnic minorities, deviant sub-cultural groups, the precarious and the poor, elites are also one of the groups that survey research has dubbed “hard to reach” populations. Large representative surveys such as the International Social Survey Program (ISSP), the European Social Survey (ESS) or the national longitudinal surveys hardly ever include significant and analysable elite groups. Different alternative data collection methods have therefore been developed or refined in order to study elites. Surveys that are specifically aimed at leaders and members of elites, such as the Norwegian Power and Democracy survey on elites (Gulbrandsen et al. 2002) are a first option that has been successfully explored in the last years (e.g. in Hjellbrekke et al. 2007). These surveys, if they are framed to make participants feel proud of belonging to an influential and powerful group, can become a viable tool to collect data on elites. The researchers can finely select and operationalize the most relevant questions, and in some cases, such as the Norwegian Power and Democracy survey, they can be linked to available register data. Public register data are a second form of data that allow one to study elites. Especially in the Scandinavian countries (such as Norway or Sweden, see the contributions of Toft and Flemmen, and Gustavson and Melldahl in the present volume) such data is available and opens exciting new research avenues, for instance about the relationship of elites to the upper classes or about elite reproduction. As these are administrative data, they also have certain limits and cover mostly rather basic and “objective” variables – and lack information on lifestyles for instance or on the attitudes and dispositions of elites. In this respect, they are similar to the taxation data which has been widely used by economists. In the last years we have also witnessed an important renewal of prosopographic data collection. In Denmark, for instance, Ellersgaard and Larsen (see their contribution in this book) have developed a path-breaking new network-based method of elite data collection. In particular their empirically based method of constituting the sample overcomes important limitations of “theoretically defined” elite samples and explores a new way of defining elites as a connected network. In Switzerland Mach, David, Ginalski and Bühlmann (also in this volume) have created one of the largest and historically most far back reaching prosopographical data bases, putting in relation economic, political, administrative and academic elites. But also in countries such as France (Denord et al. 2011; Denord and Lagneau-Ymonet 2016), the Netherlands (Timans and Heilbron in this volume) or Germany (Schneickert et al. 2015) new prosopographical data have been collected (especially on business elites). The Great British Class survey was a last, exceptional and publicly widely discussed new data source for elite studies (Savage 2015; Savage et al. 2013; also the contribution of Savage et al. in this volume). This survey was

12  Johan Heilbron et al. intended as a national survey, but it turned out that “elites” were especially likely to have completed it, and its remarkably large numbers allow the prospect of “granular” analysis of elites which is not normally possible using nationally representative surveys. These web surveys, when conducted in collaboration with far-reaching and “socially selective” media outlets (such as the BBC in this case), have the potential to generate rich and specific data on an exceptionally large sample of people belonging to the elites and the upper classes. b) New methods Of major importance has been the rise of new kinds of “relational” methods which are critical of the hegemony of “linear,” or variable-centred methods, and which are concerned to explore in detail the nature of relationships among agents, often in a highly granular way. We have already discussed the significance of geometric data analysis. A further important tool is social network analysis. In the 1970s and 1980s network analysis became one of the major methods of elite analysis, especially to study “interlocking directorates” among business elites (Fennema and Schijf 1978; Windolf 2002; Heemskerk 2013; Caroll 2013). The method of social network analysis was key to understanding the historical development of the cohesion and coordination of business elite networks (for a recent perspective see Mizruchi 2013). With its emphasis on elite unity and connectedness, it was also used to identify the “power elite” or the “inner circle” of the elite (Useem 1984). Its relational perspective is akin to multiple correspondence analysis. This method, which highlights the differences and cleavages within the elites, has been used in several national case studies to understand the resource endowment of elites and the relationships between different elite fractions (Bühlmann et al. 2012; Ellersgaard and Larsen 2013; Hjellbrekke et al. 2007; Denord et al. 2011). Ethnographic studies and other qualitative accounts of elite education and elite lifestyles are a second methodological approach which has flourished in the last years. These studies have shed light on a large number of social activities of elites and have therefore deepened our understanding of elite reproduction. These aspects include elite education and the production of exclusiveness in (sometimes private, sometimes public) elite schools (Khan 2010; Van Zanten and Maxwell 2015; Wagner 1998; Rivera 2016), professional organizations and practices of the (financial) elites (Harrington 2016; Ho 2009; Zaloom 2006), or the lifestyles, sociability strategies and leisure activities of elites (Mears 2015; Pinçot-Charlot and Pinçot 2016; Cousin and Chauvin 2014). Though most of these studies concentrate on a single country (and often on a single institution), more and more elite studies use (internationally) comparative methods. International comparison is already widespread in the framework of network studies (Hemskerk 2013; Caroll 2013), as

Introduction  13 interlocking directorates between (often multinational) firms with headquarters in different countries are relatively easy to measure and studies based on this indicator allow researchers to include a large number of countries. Other studies, examining the education, social origin and careers of business elites, often proceed by comparing a small number of countries: Maclean et al. (2005) on the UK and France; Bühlmann et al. (2017) on the UK, France, Germany and Switzerland; or Schneickert (2015) on India, the US, Brazil and Germany. The most comprehensive comparative endeavour is probably Hartmann’s study on the “myth” of the international business elites, which also includes such countries as Russia, China or Japan (2016; see also his contribution in this volume). c) New topics Several new topics have emerged in the recent years of elite research; the most important ones are linked to financialization and globalization of capitalism. The financialization of capitalism has been one of the landmark transformations of the last 30 years (Krippner 2005; Van der Zwan 2014). Therefore, elite research also began to explore the financial industry, its functioning and its major institutions and professions. In this perspective Ho (2009) studied the functioning of Wall Street; Godechot (2016) and Zaloom (2006) stockmarket traders; Harrington (2016) wealth managers; and others studied investors and financial managers (Windolf 2008; Useem 1996) or capital market intermediaries (Folkman et al. 2007). This literature compares these rising professional groups with the corporate managers, asks if and how they are different (Useem 1996), how they organize themselves, and whether they can be considered a relatively cohesive social group (Folkman et al. 2007). Some of the studies also show how these professional groups are able to gain influence on governments and sometimes very directly change the inequality regimes in both western societies and tax havens (Harrington 2016). Internationalization, globalization or transnationalization are some of the concepts with which the social sciences have reacted to the densification of international exchange of goods, services, ideas and persons in the last 40 years. The internationalization of the economy has also led to new developments in elite research, particularly in studies of the business elite. On the one hand the geographical scope has been extended and now includes for example countries such as Brazil, India, Russia or China (Schneickert 2015; Naudet and Dubost 2017; Hartmann 2016). The interlocking directorate literature also includes more countries and has extended its scope to the European and even global level (Carroll 2013; Heemskerk et al. 2016). Other strands of literature concentrate specifically on transnational elites, which are no longer linked to specific nation states and have emerged as a result of supra-national regulation frameworks such as the European Union. Georgakakis and Rowell for instance have

14  Johan Heilbron et al. analysed the field of the “Eurocrats,” the different groups of European civil servants and their networks (Georgakakis and Rowell 2013). In a similar vein Vauchez has studied the European Court of Justice as a transnational elite group (Vauchez 2012). Besides financialization and globalization, a series of other topics have extended the thematical scope of elite research. Recent research, for example on family offices (Glucksberg and Burrows 2016) or the roles women play for male elite sociability (Mears 2015), have examined the gender dimension of elite power. They ask what roles families and women play for elite reproduction, for the production of the male elite members, and how this female work is made socially invisible (Glucksberg in this volume). New mechanisms of elite influence, for instance through lobbying or through think tanks, have also been explored more thoroughly (Medvetz 2013). Others, influenced by the new economic research agenda on inequality, have studied the rise of a class of extremely wealthy individuals (Rothkopf 2009) or the consequences of growing inequality and elite power (Wilkinson and Pickett 2009). As these examples indicate, much of the current work on elites attempts to go beyond a merely economic perspective. Given that the predominant economic perspective on inequality and elites has significant limitations, this book aims to go beyond their contributions in three ways: 1 Instead of relying primarily on statistical categories, this book focuses on actual social groups and classes and on the positions they occupy in social space. However useful statistical categories like the 1 percent or 0.1 percent are for making comparisons in time and across countries and for unravelling historical trends, they remain statistical abstractions. The 0.1 percent, for example, is socially a very heterogeneous group that in reality refers to a social universe, a “field of power” for and within which various agents – groups and individuals – compete. This book aims at empirically and analytically shedding new light on the social composition of those who form the “field of power,” the changes in its social composition over time, as well as its patterns of recruitment and its forms of conflict, complicity and closure. 2 Instead of limiting inequality and elite formation to the accumulation of economic resources (income, wealth), this book systematically takes other resources into account as well. Among these other resources, educational, social and symbolic capital are of particular importance. The book will demonstrate that the formation and functioning of “elites” is thus a significantly more differentiated social process than is depicted in popular narratives about the “rich and wealthy” and than is assumed by some economists. It is simultaneously shown that the economic and financial elite itself cannot be properly understood without inquiring into other than economic resources they possess and mobilize. 3 Instead of restricting the method of inquiry to statistics and mathematical modelling, as economists tend to do, this book mobilizes a broad

Introduction  15 scope of research methods, depending on the kind of research questions asked rather than by a priori limiting the analysis to the standard repertoire of quantitative methods. Rationally combining different research methods seems a more urgent and rewarding task in contemporary social science than the refinement of any specialized research technique itself. By aiming to go beyond the predominant economic approaches to inequality and elite rule, this book has a two-fold objective: to assemble the most advanced research from a variety of disciplines (anthropology, sociology, political science, history), and to explore and highlight issues and questions that we consider to be essential for future research.

Outline of the book The book is divided into four sections. The first section, on the “Myth of a global business elite,” tackles the much debated issue of economic globalization and the presumed rise of a “global” or transnational business elite. According to a widespread view, globalizing forces have produced a transnational elite, which is increasingly eclipsing national elite formation. The three chapters in the first section engage with this issue by considering to what degree economic elites, e.g. the top managers in banking, finance and business, can be said to form a transnational elite. Has “globalization” resulted in a truly worldwide elite, or are elites still primarily entrenched in national structures, i.e. mainly national educational trajectories, recruitment patterns and career patterns? In Chapter 2, Michael Hartmann radically challenges the idea of a transnational corporate elite. Analysing the CEOs of the 1,000 biggest enterprises in the world in 2015, he finds that foreigners among them are very rare. In some countries – Great Britain, Australia and Switzerland – a split is found between an international and a national business elite. In the Netherlands and in Germany, he similarly finds a split between CEOs with significant foreign experience and CEOs with only a medium degree of international activity. If the analysis is restricted to the 100 largest companies in Germany, France, Great Britain, the US, Japan and China, the low proportion of foreigners is confirmed. In terms of transnationality three patterns are found: German and British top managers have a relatively high level of foreign experience. Among French and US managers, such experiences remain rarer; among Japanese and Chinese managers they are exceptional. Contrary to expectations, elite business schools do not play a central role in the formation of an international business elite. Rather than increasing internationalization and global convergence, a continuation of national recruitment and career patterns is more likely. An additional analysis of the 1,000 richest billionaires confirms the importance of national ties. With very few exceptions, billionaires continue to live primarily in the country where they were born. If capital flows freely across borders, capitalists do not.

16  Johan Heilbron et al. The next two chapters deepen the analysis by focusing on two of the most “internationalized” countries. Chapter 3 on the Dutch business elite, by Rob Timans and Johan Heilbron, examines the Dutch business field based on data on the largest Dutch companies. The authors reveal an internal opposition between a nationally oriented and a small, internationally oriented and non-Dutch group of CEOs. Members of the two remain structurally separate from each other. The foreigners do not participate in clubs and organizations where they could meet their Dutch peers, indicating a separation between the small group of international CEOs and a considerably larger group of nationally rooted and embedded CEOs. In Chapter 4 on the dynamics of internationalization among Swiss bankers, Pedro Araujo finds a similar opposition between national and international careers. Internationality functions as a major cleavage. Contrary to expectations, however, an international career is not clearly linked to educational trajectories or to having an education from a prestigious business school. Internal careers relying on comparatively low educational credentials remain a possibility in the larger international banks. A clear trend towards more international and borderless banking careers was not found. The combined result of these chapters casts severe doubts on the assumptions of an increasingly international elite in business, banking and finance. The findings point to a better understanding, notably, of the linkages between national and transnational or global processes. Since business elites, not to speak of political, bureaucratic and cultural elites, are primarily situated within their national contexts, the subsequent parts of this book consider the formation and functioning of elites in a variety of advanced countries, ranging from the UK to Nordic social-democratic states (Norway, Sweden, Denmark) to Germany and France. The second section, “Scrutinizing the power elite and the field of power,” presents a systematic analysis of the “field of power” in different countries (Norway, Denmark, UK) and on this basis outlines a new approach to the study of elites. It elaborates ideas of Pierre Bourdieu and rethinks the contribution of authors like C. Wright Mills on the power elite by using new data sets and rarely used statistical methods (correspondence analysis), thus providing a fresh alternative to more restrictive, either economic or political conceptions of elites. Central in this section are the relationships between different elite fractions, such as the economic elite, the political elite and the cultural elite. Based on the concepts of the “field of power” and the “power elite”, the various chapters examine the comparative value of political, academic or cultural assets within recent elite configurations and show how economic wealth is sometimes opposed and sometimes closely linked to other forms of capital, which give access to the most powerful positions in society. The authors of these chapters employ a wide range of methodological strategies to identify and study elite members from different institutional orders and how they relate to one another. The authors of Chapter 5, Johs. Hjellbrekke and Olav Korsnes, rely on Bourdieu’s concept of the field of power to study the relationship among

Introduction  17 the Norwegian elite fractions. The field of power is the space where dominant agents are engaged in struggles about the hierarchies within, but also between different fields. The field of power has its own set of capitals, symbolic capital hierarchies and arenas of consecration. To be recognized as a “worthy” field participant by one’s peers holds particular significance for the agents. One such arena of consecration is the official dinners hosted by state agencies and bodies, exclusive clubs, powerful associations, etc. The authors focus on the annual dinner of the Norwegian Central Bank, for which prominent guests from politics, finance, industry, journalism and academia are invited. Based on extensive prosopographic data collection on 275 individuals, Hjellbrekke and Korsnes analyse the seating order, i.e. at what table the individual is placed, as an indicator of the person’s location in the symbolic capital hierarchy in the Norwegian field of power. The authors conduct a multiple correspondence analysis (MCA) based on more than 40 variables of economic, political, social and cultural capital. They find various axes of differentiation: the first opposes the economic and financial elite to all other elite fractions; the second distinguishes the most established elite from the newcomers; the third axis differentiates according to specific social background. The pattern and principles of differentiation are homologous to the structures of the global Norwegian field of power, with a tripolar opposition between positions in the business field, positions in politics and positions in academia and in the higher civil service. From this perspective, the analysis thus confirms the results of earlier research, and gives partial support to Bourdieu’s homology thesis. Chapter 6 on “The gendered reproduction of the upper class” by Maren Toft and Magne Flemmen provides the first systematic analysis of how the degree of social closure of the upper regions of social space varies for men and women. Unlike traditional studies of social mobility, class relations are regarded as two-dimensional, involving both economic and cultural capital. Based on a case study of the Norwegian upper classes, a differentiation is found between an economic, a cultural and a professional fraction of the upper class. Exploiting the unique Norwegian register data, encompassing the entire population of Norway, multinomial regressions are used to compare the degree of intergenerational social closure of these different fractions. By measuring social origin with a novel class scheme that captures the two main dimensions of social space – the volume and the composition of capital – a person’s chances of joining the ranks of the different upper-class fractions are analysed. The key question is whether different forms of capital interact with gender in generating patterns of upper-class recruitment. While there are only negligible differences in the influence of a mother’s class or a father’s class, we find that forms of capital may generate gender-specific payoffs, following a gendered logic of fields. When entering the cultural fraction of the upper class, parental capital appears genderneutral, while the payoff of all species of capital is of comparatively greater importance for daughters than sons when entering the economic field or the liberal professions.

18  Johan Heilbron et al. In Chapter 7, Christoph Ellersgaard and Anton Grau Larsen identify a vast Danish power network of more than 5,000 potentially powerful affiliations containing 37,750 individuals. They single out a core group of 423 individuals by social network analysis. The composition and size of this core group reflect the relative importance of different institutional orders and the concentration of power within the limits of the nation state. This “power elite” is characterized by three aspects: its members simultaneously hold top positions in their respective institutional hierarchies; their power resources are valued by agents from other institutional hierarchies; and they form a cohesive group tied by multiple shared affiliations. The authors argue that the composition and size of this group reflects the relative importance of different institutional orders and the concentration of power in Denmark. Even though it is tightly connected, this elite group includes leaders from the key institutional orders: business, politics and unions. More than half of this elite have a primary position in the corporate sector or in business associations. While the 423 elite members participate in very different organizations, they share a homogenous social profile in terms of gender, class background, education and residential patterns. The 423 core members of the power elite can be regarded as a committee for managing the affairs of the power elite as a whole. The authors discuss how the significance of a national power elite such as the Danish one may be decreasing because of the growing importance of transnational capital, but the structure of the power elite still gives insights into which institutions are most relevant for becoming part of the inner circles of power. Chapter 8 on the anatomy of the British economic elite, by Mike Savage, Katharina Hecht, Johs. Hjellbrekke, Niall Cunningham and Daniel Laurison, reports the social, cultural and geographical profiles of top earners in Britain using data from the Great British Class Survey. This uses the unprecedented sample size of top earners to give unusual insight into this small group, with a view to considering how culturally and socially exclusive they are, more particularly how far they differ from those who are moderately well off. It shows that although the super-rich are culturally and socially distinguished from other somewhat less advantaged economic groups, these differences should not be over-estimated. The economic elite are not a clearly demarcated upper class (such as an aristocracy), marked out by their consumption and cultural preferences as a distinctive, ascribed group, compared to middle and lower ranks of society. The main exception lies in the geographical concentration of these very high earners around West London, and their underrepresentation in other cities, which is a marked demonstration of the overlap between geographical and social patterns. The third section on social closure and reproduction strategies takes up the issue of how elites reproduce themselves by looking at two of the most basic mechanisms of reproduction: wealth and gender. To what degree is economic inequality, both through income and wealth, reproduced over time? How internally stable are these elite formations? What capital accumulation strategies are seemingly the most successful for gaining access to

Introduction  19 the elite? In what ways do families produce and reproduce elite membership? How can this “gendered division of elite labour” manifest itself? And in what ways can culture both be used as a resource for co-optation of nonelite groups and at the same time continue to be part of a strategy for elite closure? The chapters in this section investigate these processes through four case studies. The authors of Chapter 9, Martin Gustavsson and Andreas Melldahl, propose the following argument: while the “one percent” has gained a lot of attention in recent years, very little is known about those actually constituting this distributional group residing at the top of the economic hierarchy. Based on the case of Sweden, their chapter focuses on the top 1 percent, examining the economic position of this group, as well as the social composition of the holders of the largest private wealth over a period of almost a century. By combining data extracted from printed registers of wealth with digital registers of wealth possession, both covering the county of Stockholm, the authors examine the top 1 percent at six points in time (from 1914 to 2006). The economic position of the top percent has changed drastically, following the pattern known from Piketty’s work: sharply declining levels of economic power are experienced by the wealthiest up until the 1980s. Thereafter we again witness quickly rising levels. Notwithstanding these radical economic, social and political transformations during the period examined, the results show a striking continuity. Throughout the twentieth century, and into the twenty-first, the social composition of the top wealth holders in Sweden has been largely the same, hinting at a hitherto empirically unknown social dimension of Piketty’s “fundamental laws of capitalism.” In Chapter 10, Nora Waitkus and Olaf Groh-Samberg argue that sociological class analysis has largely neglected wealth as a structuring factor and even as a distributional outcome or correlate of social class inequalities. They show that in recent years a main concern has been the rapid accumulation of economic capital, both income and wealth, at the very top of the distribution. Moreover, wealth has become increasingly relevant not only for the elites but also for the upper-middle classes as an entry strategy into elite positions. In contrast to social class schemes based on occupations, the authors follow a capital-based perspective on class analysis that explicitly takes wealth in its various components into account. Drawing on household panel data from the years 2002–2012 of the German Socio-Economic Panel Study (SOEP), the authors apply Latent Class Analysis to detect distinct classes at the very top which are based on different capital portfolios. Focusing on the upper-middle and elite positions, they distinguish five classes that are characterized by different wealth and income profiles (home owners, asset holders, petty bourgeoisie and landlords, (managerial) elite and top elite). Making use of the longitudinal character of the SOEP, the authors explore different accumulation profiles of wealth and incomes in a longitudinal five-year perspective (i.e. 2002 to 2007, and 2007 to 2012). Further, they investigate how far the upper-middle classes and elites are socially

20  Johan Heilbron et al. mobile across classes. Their results reveal strong differences between risky (financial) and secure (long-term) accumulation profiles within the uppermiddle classes and elites. In Chapter 11 Luna Glucksberg looks at gender issues. Elite studies are strangely abstract and disembodied, concerned as they are with men, their networks, and their connections to elite institutions. Very little research is devoted to how families actually produce and reproduce these beings. Through a detailed ethnographic approach Luna Glucksberg explores the complexities of performing specific, cultural, classed and embodied gender identities in the exclusive “Alpha Territories” of London. Specifically, she focuses on women in their capacity of full-time mothers and wives responsible for the biological, social and educational production of the family, as well as in their role of “girls” who facilitate socializing by providing the appropriate backdrop of young pretty flesh that is the main currency of Mayfair by night. Glucksberg shows how gendered, embodied identities and performances are crucial in ensuring the transformation and transfer of capital – from economic to educational and social to symbolic – and how fundamental these transformations are for understanding how inequality is produced and reproduced. The fourth and last section on “Elite reproduction, education and legitimacy” continues the previous section by looking more particularly at education and schooling, that is, at processes of selection, socialization and closure in and through educational institutions. Chapter 12 by Felix Bühlmann, Thierry Rossier, and Pierre Benz studies an aspect of elite formation which again has not received much attention: the relationship between university professors and political, economic and administrative elites through networks of (doctoral) students. The objective is to explain the networks of PhD students who become members of the Swiss elites. These networks can be considered as the result of the “placement power” of their professors. The ability to attract certain PhD students and equip them with the necessary resources allows them to become elite members themselves – either as university professors, as members of Parliament, as top managers of large Swiss firms or as high civil servants. Based on samples of law professors and professors of economics and business, which cover the entire twentieth century, it is shown, first, that law professors have larger and more transversal doctoral student networks – their networks include many more doctoral students who become elite members of the political, economic and administrative spheres alike. While scientific capital in a narrow sense does not increase the placement power of professors, positions situated at the interface between the academic and other fields, such as rectors or committee members of scientific organizations, have a clear positive effect on the size of doctoral student networks. When it comes to spatial domination, being a professor in a German-speaking university improves the chances of having large PhD student networks. The intergenerational transmission of social capital only works for law, clearly the more traditional of the two disciplines with a well-established dynastic

Introduction  21 structure. The approach explores aspects of acquaintance networks in the field of power – which are complementary to approaches focusing on interlocking directorates, meeting places or informal personal networks. Chapter 13 by Ugo Lozach is about the rise of second-rank elite schools in France. These institutions claim the status of elite schools (grandes écoles) and contribute to redefining the boundaries of the upper class. Focused on a network of nine second-rank elite schools, Instituts d’Etudes Politiques (IEP), these colleges offer a comprehensive five-year education in economics, law, history and political science. They position themselves between open admission universities and the most selective grandes écoles. Their comprehensive curriculum and the various networks in which IEPs are embedded enable students to access a plurality of professional careers – some elite and others less so (civil servants, managers, lawyers, journalists, scholars). Studying student choices and strategies while at these institutions provides important insights into how students perceive and hierarchize elite occupational fields. Two aspects are studied in detail. The first concerns how certain students distinguish their college choice from other educational alternatives. The second explores how students in these second-rank institutions make professional choices in the face of professional ceilings and thresholds. The former – ceilings – refers to elite occupations that are considered inaccessible. The latter – thresholds – refers to occupations that are deemed unworthy of an IEP student. The findings help to shed light on how the symbolic boundaries of the elite as a group are constructed in an institution where elite status is not taken for granted. In Chapter 14 Felix Stein presents an ethnographic study of German management consultants, an elite group both in their own eyes and in those of the general public. His vantage point is that definitions of social elites frequently hinge on the concept of legitimation, posing the questions of how the criteria that define elite belonging are determined in particular social settings and who decides when and how these criteria have been fulfilled. Based on two years of participant observation and over 80 interviews with management consultants in Berlin, Stein argues that one of the main goals of their work is to legitimize the hierarchical position of the managers who hire them, a task that in turn hinges on legitimizing their own work activity in a client company. These efforts of legitimation are interdependent in that clients who are legitimized by consultants will be inclined to accept the latter’s analyses and recommendations, while only consultants whose work is seen as legitimate are in a position to strengthen their clients. The ethnography demonstrates that consultants achieve legitimacy by skilfully crossing corporate boundaries, positioning themselves either as insiders or as outsiders of the companies that hire them. This movement entails an oscillation between two contradictory conceptions of knowledge, namely a positivist one and a perspectival one. In analysing techniques of legitimation by reference to group belonging, this argument should be understood as a careful critique of and as a complement to studies of elites that predominantly

22  Johan Heilbron et al. focus on wages, charisma, habitus or social capital to make sense of intracorporate regimes of power. Opposing the idea of a homogeneous elite or ruling class, this section demonstrates how the differentiation of class fractions, based on different positions in the field of power and related forms of capital, is nevertheless accompanied by strong effects of elite closure. Central to both processes, differentiation and closure, are elite schools. Focusing on the functioning of these educational institutions allows a more refined understanding of elite formation, at the same time making it possible to raise issues of elite closure and reproduction in new ways. Elite legitimacy is produced by educational institutions in two ways: on the one hand by “meritocratic” selection in the school system, on the other by forming knowledge elites (consultants, lobby groups, think tanks) who contribute to legitimizing existing power relations. The concluding chapter by Mike Savage and Georgia Nichols synthesizes these contributions by reflecting on how to conceptualize elites in contemporary conditions of increasing inequality whilst recognizing their internal heterogeneity and frequent lack of social and cultural coherence. The chapter argues against economistic readings of contemporary elites which would see them as simple products of economic trends since in recent years the trend towards income shares moving towards the 1 percent is at best mixed. The chapter emphasizes the wider social and cultural processes by which elites might be understood sociologically. It argues that although it can be strategically useful to view them as classes, as a means of recognizing their agency and significance in shaping social change, such concepts imply a greater sense of shared identity, values and internal homogeneity than elites normally possess. Instead, we note how elite lives are bound up with tensions, contestation and internal disputes. The chapter uses the metaphor of elite “constellation” which captures the construction of elites as being formed through the aesthetic assemblage of separate elements. It then focuses on the importance of the concept of accumulation for foregrounding the way that elites are shaped by their (often) long-term build-up of resources and assets, for instance in establishing the temporal dynamic of established versus outsiders. This book therefore offers a renewal of sociological approaches to elites which extends conceptual and methodological repertoires and provides key insights into the formation of elites to complement important research conducted by economists.

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24  Johan Heilbron et al. Denord, François, Paul Lagneau-Ymonet, and Sylvain Thine. 2011. “Le champ du pouvoir en France.” Actes de la recherche en sciences sociales 5(2011): 24–57. Dogan, Mattei (ed.). 2003. Elite Configurations at the Apex of Power. Leiden: Brill Publishers. Domhoff, G. William. 1967. Who Rules America? Englewood Cliffs, NJ: Prentice-Hall. Ellersgaard, Christoph Houman, Anton Grau Larsen, and Martin D. Munk. 2013. “A Very Economic Elite: The Case of the Danish Top CEOs.” Sociology 47(6): 1051–71. Fennema, Meindert, and Eelke Heemskerk. 2016. “When Theory Meets Methods: The Naissance of the Field of Corporate Interlock Research.” https://papers. ssrn.com/sol3/papers.cfm?abstract_id=2827627 Fennema, Meindert, and Huibert Schijf. 1978. “Analysing Interlocking Directorates: Theory and Methods.” Social Networks 1(4): 297–332. Field, G. Lowell, and John Higley. 1980. Elitism. London: Routledge. Fligstein, Neil. 1990. The Transformation of Corporate Control. Cambridge, MA: Harvard University Press. Fligstein, Neil. 2001. The Architecture of Markets: An Economic Sociology of TwentyFirst-Century Capitalist Societies. Princeton, NJ: Princeton University Press. Folkman, Peter, Julie Froud, Sukhdev Johal, and Karel Williams. 2007. “Working for Themselves? Capital Market Intermediaries and Present Day Capitalism.” Business History 49(4): 552–72. Freeman, L. C. 2004. The Development of Social Network Analysis: A Study in the Sociology of Science. Vancouver: BookSurge. Froud, Julie, Mike Savage, Gindo Tampubolon, and Karel Williams. 2006. “Rethinking Elite Research.” Working Paper, Centre for Research on Socio-Cultural Change (CRESC). Frydman, Carola, and Raven E. Saks. 2010. “Executive Compensation: A New View From a Long-Term Perspective, 1936–2005.” Review of Financial Studies 23(5): 2099–138. Genieys, William. 2010. The New Custodians of the State: Programmatic Elites in French Society. New Brunswick, NJ: Transaction Publishers. Georgakakis, D., and J. Rowell (eds.). 2013. The Field of Eurocracy: Mapping EU Actors and Professionals. Amsterdam: Springer. Ghilarducci, Theresa. 2008. When I’m Sixty-Four: The Plot Against Pensions and the Plan to Save Them. Princeton, NJ: Princeton University Press. Glucksberg, Luna, and Roger Burrows. 2016. “Family Offices and the Contemporary Infrastructures of Dynastic Wealth.” Sociologica 10(2). doi: 10.2383/85289. Godechot, Olivier. 2016. Les traders: essai de sociologie des marchés financiers. Paris: La Découverte. Gulbrandsen, Trygve, Fredrik Engelstad, Trond Beldo Klausen, Hege Skjeie, Mari Teigen, and Øyvind Østerud. 2002. Norske makteliter (Norwegian Power Elites). Oslo: Gyldendal Akademisk. Hacker, Jacob. 2006. The Great Risk Shift: The New Economic Insecurity and What Can Be Done About It. Oxford: Oxford University Press. Harrington, Brooke. 2016. Capital Without Borders. Cambridge, MA: Harvard University Press. Hartmann, Michael. 2007. The Sociology of Elites. London and New York: Routledge. Hartmann, Michael. 2016. Die globale Wirtschaftselite: Eine Legende. Frankfurt: Campus Verlag. Harvey, David. 2005. A Brief History of Neoliberalism. New York: Oxford University Press.

Introduction  25 Heemskerk, Eelke M. 2013. “The Rise of the European Corporate Elite: Evidence From the Network of Interlocking Directorates in 2005 and 2010.” Economy and Society 42(1): 74–101. Heemskerk, Eelke M., Meindert Fennema, and William K. Carroll. 2016. “The Global Corporate Elite After the Financial Crisis: Evidence From the Transnational Network of Interlocking Directorates.” Global Networks 16(1): 68–88. Heilbron, Johan. 2005. “Taking Stock: Toward a Historical Sociology of Financial Regimes.” Economic Sociology: European Electronic Newsletter 7(1): 3–17. Heilbron, Johan, Jochem Verheul, and Sander Quak. 2014. “The Origins and Early Diffusion of ‘Shareholder Value’ in the United States.” Theory and Society 43(1): 1–22. Heyck, Hunter. 2015. Age of System: Understanding the Development of Modern Social Science. Baltimore, MD: Johns Hopkins University Press. Higley, John. 2008. “Elite Theory in Political Sociology.” Paper presented at the IPSA-2008 Conference, Montréal, April 30–May 2, 2008. http://paperroom.ipsa. org/papers/view/4036. Higley, John, and Michael Burton. 2006. Elite Foundations of Liberal Democracy. Lanham, MD: Rowman and Littlefield. Hjellbrekke, Johs, Brigitte Le Roux, Olav Korsnes, Frédéric Lebaron, Lennart Rosenlund and Henry Rouanet. 2007. “The Norwegian Field of Power Anno 2000.” European Societies 9(2): 245–73. Ho, Karen. 2009. Liquidated: An Ethnography of Wall Street. Durham, NC: Duke University Press. Jung, Jiwook, and Frank Dobbin. 2012. “Finance and Institutional Investors.” In Karin Knorr-Cetina and Alex Preda (eds.), The Oxford Handbook of the Sociology of Finance. Oxford: Oxford University Press, 52–74. Kaplan, Steven, and Joshua Rauh. 2013. “It’s the Market: The Broad-Based Rise in the Return to Top Talent.” Journal of Economic Perspectives 27(3): 35–56. Khan, Shamus Rahman. 2010. Privilege: The Making of an Adolescent Elite at St. Paul’s School. Princeton, NJ: Princeton University Press. Khan, Shamus Rahman. 2012. “The Sociology of Elites.” Annual Review of Sociology 38: 361–77. Khurana, Rakesh. 2007. From Higher Aims to Hired Hands: The Social Transformation of American Business Schools and the Unfulfilled Promise of Management as a Profession. Princeton, NJ: Princeton University Press. Krippner, Greta R. 2005. “The Financialization of the American Economy.” SocioEconomic Review 3(2): 173–208. Kuznets, Simon. 1953. Shares of Upper Income Groups in Income and Savings. Cambridge, Massachusetts: National Bureau of Economic Research. Larsen, Anton Grau, and Christoph Houman Ellersgaard. 2017. “Identifying Power Elites-–k-Cores in Heterogeneous Affiliation Networks.” Social Networks 50: 55–69. Lazonick, William. 2016. “Stock Buybacks: From Retain-and-Reinvest to Downsizeand-Distribute.” Brookings Institution. www.brookings.edu/wp-content/ uploads/2016/06/lazonick.pdf. Lazonick, William, and Mary O’Sullivan. 2000. “Maximizing Shareholder Value: A New Ideology for Corporate Governance.” Economy and Society 29(1): 13–35. Le Roux, Brigitte, and Henry Rouanet. 2004. Geometric Data Analysis: From Correspondence Analysis to Structured Data Analysis. Dordrecht, The Netherlands: Kluwer Academic Publishers. Le Roux, Brigitte, and Henry Rouanet. 2010. Multiple Correspondence Analysis. Thousand Oaks, CA: Sage Publications.

26  Johan Heilbron et al. Lebaron, Frédéric, and Brigitte Leroux (eds.). 2015. La méthodologie de Pierre Bourdieu en action. Espace culturel, espace social et analyse des données. Paris: Dunod. Lucas, Robert. 2004. “The Industrial Revolution: Past and Future.” Economic Education Bulletin 44(8): 1–8. www.minneapolisfed.org/publications/the-region/ the-industrial-revolution-past-and-future Maclean, Mairi, Charles Harvey, and Jon Press. 2005. Business Elites and Corporate Governance in France and the UK. Amsterdam: Springer. Mears, Ashley. 2015. “Girls as Elite Distinction: The Appropriation of Bodily Capital.” Poetics 53: 22–37. Medvetz, Thomas. 2013. “Les think tanks dans le champ du pouvoir étasunien.” Actes de la recherche en sciences sociales 5: 44–55. Milanovic, Branko. 2016. Global Inequality: A New Approach for the Age of Globalization. Cambridge, MA: Harvard University Press. Mizruchi, Mark. 1996. “What Do Interlocks Do? An Analysis, Critique and Assessment of Research on Interlocking Directorates.” Annual Review of Sociology 22(1): 271–98. Mizruchi, Mark. 2013. The Fracturing of the American Corporate Elite. Cambridge, MA: Harvard University Press. Nader, Laura. 1969. “Up the Anthropologist – Perspectives Gained From Studying Up.” In Dell Hymes (ed.), Reinventing Anthropology. New York: Vintage Books. Naudet, Jules, and Claire-Lise Dubost. 2017. “The Indian Exception: The Densification of the Network of Corporate Interlocks and the Specificities of the Indian Business System (2000–2012).” Socio-Economic Review 15(2): 405–34. O’Sullivan, Mary. 2000. Contests for Corporate Control: Corporate Governance and Economic Performance in the United States and Germany. Oxford: Oxford University Press. Piketty, Thomas. 2001. Les hauts revenus en France au 20eme siècle: inégalités et redistribution, 1901–1998. Paris: Grasset. Piketty, Thomas. 2014. Capital in the Twenty-First Century. Cambridge, MA: Harvard University Press. Piketty, Thomas. 2015. “Putting Distribution Back at the Center of Economics: Reflections on Capital in the Twenty-First Century.” Journal of Economic Perspectives 29(1): 67–88. Pinçon, Michel, and Monique Pinçon-Charlot. 2016. Sociologie de la bourgeoisie. Paris: La Découverte. Porter, Theodore, and Dorothy Ross (eds.). 2003. The Modern Social Sciences: The Cambridge History of Science, Vol. 7. Cambridge: Cambridge University Press. Prasad, Monica. 2006. The Politics of Free Markets: The Rise of Neoliberal Economic Policies in Britain, France, Germany, and the United States. Chicago: Chicago University Press. Rivera, Lauren A. 2016. Pedigree: How Elite Students Get Elite Jobs. Princeton, NJ: Princeton University Press. Rothkopf, David. 2009. Superclass: The Global Power Elite and the World They Are Making. New York: Farrar, Straus and Giroux. Savage, Mike. 2015. Social Class in the 21st Century. London: Pelican. Savage, Mike, et al. 2013. “A New Model of Social Class? Findings From the BBC’s Great British Class Survey Experiment.” Sociology 47(2): 219–50. Savage, Mike, and Karel Williams. 2008. “Elites: Remembered in Capitalism and Forgotten by Social Sciences.” The Sociological Review 56(1): 1–24. Scheidel, Walter. 2017. The Great Leveler: Violence and the History of Inequality From the Stone Age to the Twenty-First Century. Princeton, NJ: Princeton University Press.

Introduction  27 Scheuch, Erwin K. 2003. “The Structure of the German Elites Across Regime Changes.” In Mattei Dogan (ed.), Elite Configurations at the Apex of Power. Leiden: Brill Publishers, 91–133. Schneickert, Christian. 2015. Nationale Machtfelder und globalisierte Eliten. Konstanz: UVK Verlagsgesellschaft. Schneickert, Christian, Andreas Kroneder, and Regine Schwab. 2015. “Globalizing Elites From the ‘Global South’: Elites in Brazil and India.” In Alexander Lenger and Florian Schumacher (eds.), Understanding the Dynamics of Global Inequality. Berlin Heidelberg: Springer, 229–43. Schumpeter, Joseph. 1954. History of Economic Analysis. New York: Oxford University Press. Shore, Cris, and Stephen Nugent (eds.). 2002. Elite Cultures, Anthropological Perspectives. London: Routledge. Soss, Joe, Jacob Hacker, and Suzanne Mettler (eds.). 2007. Remaking America: Democracy and Public Policy in an Age of Inequality. New York: Russell Sage Foundation. Stiglitz, Joseph. 2012. The Price of Inequality: How Today’s Divided Society Endangers our Future. New York: W.W. Norton Company. Stiglitz, Joseph. 2015. The Great Divide: Unequal Societies and What We Can Do About Them. New York: W.W. Norton Company. Stryker, Rachael, and Roberto González (eds.). 2014. Up, Down and Sideways: Anthropologists Trace the Pathways of Power. New York: Berghahn Books. Suleiman, Ezra. 1997. “Les élites de l’administration et de la politique dans la France de la Ve République: homogénéité, puissance, permanence.” In E. Suleiman and H. Mendras (eds.), Le recrutement des élites en Europe. Paris: La Découverte, 19–47. Timans, Rob. 2015. “Studying the Dutch Business Elite: Relational Concepts and Methods.” PhD Dissertation, Erasmus University Rotterdam. Useem, Michael. 1984. The Inner Circle: Large Corporations and the Rise of Business Political Activity in the U.S. and U.K. Oxford: Oxford University Press. Useem, Michael. 1993. Executive Defense: Shareholder Power and Corporate Organization. Cambridge, MA: Harvard University Press. Useem, Michael. 1996. Investor Capitalism: How Money Managers Are Changing the Face of Corporate America. New York: Basic Books. Van Zanten, Agnès, and Claire Maxwell. 2015. “Elite Education and the State in France: Durable Ties and New Challenges.” British Journal of Sociology of Education 36(1): 71–94. Van der Zwan, Natascha. 2014. “Making Sense of Financialization.” Socio-Economic Review 12(1): 99–129. Vauchez, Antoine. 2012. “Keeping the Dream Alive: The European Court of Justice and the Transnational Fabric of Integrationist Jurisprudence.” European Political Science Review 4(1): 51–71. Wagner, Anne-Catherine. 1998. Les nouvelles élites de la mondialisation: une immigration dorée en France. Paris: Presses Universitaires de France. Wilkinson, Richard, and Kate Pickett. 2009. The Spirit Level: Why More Equal Societies Almost Always Do Better. London: Allen Lane. Wilterdink, Nico. 1995. “Increasing Income Inequality and Wealth Concentration in the Prosperous Societies of the West.” Studies in Comparative International Development 30(3): 3–23. Wilterdink, Nico. 2000. “The Internationalization of Capital and Trends in Income Inequality in Western Societies.” In D. Kalb, M. van der Land, R. Staring, B. van Steenbergen, and N. Wilterdink (eds.), The Ends of Globalization: Bringing Society Back In. Lanham, MD: Rowman & Littlefield, 187–200.

28  Johan Heilbron et al. Windolf, Paul. 2002. Corporate Networks in Europe and the United States. Oxford: Oxford University. Windolf, Paul. 2008. “Eigentümer ohne Risiko/Owners Without Risk.” Zeitschrift für Soziologie 37(6): 516–35. Wright Mills, C. 1956. The Power Elite. New York: Oxford University Press. Zaloom, Caitlin. 2006. Out of the Pits: Traders and Technology From Chicago to London. Chicago: University of Chicago Press. Zucman, Gabriel. 2015. The Hidden Wealth of Nations. Chicago: Chicago University Press.

Section 1

The myth of a global business elite

2 The international business elite Fact or fiction? Michael Hartmann

1 Introduction Since Marceau in the late 1980s published her study on INSEAD – with the striking subtitle The Making of an International Business Elite (Marceau 1989) – the relevant publications have repeatedly referred to the development or even established existence of a “global elite,” an “international business class” or a “transnational capitalist class.” In most cases, however, the authors argue rather superficially. They move (in most cases within one and the same text) between a rather direct parallelization of economic structural changes and processes of class development on the one hand and immediate personalization of globalization on the other. On the grounds that there is an increase in cross-national economic integration at all levels and that the share of internationally active multi-corporate enterprises of the gross world product has grown as clearly as the share of international funds of the stock capital of these same companies, in most cases they conclude from this rather immediately the existence of a transnational global elite or capitalist class. However, there is no deeper analysis of the actual processes of elite or class formation. At best, the authors are satisfied with pointing to the board memberships of foreign, external persons and otherwise give only unsystematic individual impressions from the world of the rich. Typical of this kind of analysis – notwithstanding all differences – are the works by Dahrendorf (2000), Kanther (1995), Robinson (2004), van der Pijl (1994) or Sklair (2001). Among those representing this position, clearly Carroll (2009, 2010) provides the empirically most careful analysis. He analyses the connections between the board members of the 500 biggest enterprises in the world between 1996 and 2006 and comes to the conclusion that one may therefore rightly speak of a “global corporate elite” (Carroll 2009: 295, 2010: 34). Between 1996 and 2006, he states, the transnational network of top managers has intensified instead of becoming looser. However, he says, the network of “transnationalists” is not yet truly global but basically regional, i.e. North Atlantic, covering North America and Europe. In contrast to the many authors who readily employ terms such as global or transnational elite, Carroll, being a careful empiricist, points out the limits of his analysis.

32  Michael Hartmann He explicitly emphasizes that speaking of a business elite which is no longer nationally rooted but acts within a transnational space underestimates the stubbornness of national and regional ties. However, despite this self-formulated reservation, the studies of Carroll represent only a minority among the more recent works. Whereas at the beginning of the millennium publications which predicted an international or global business elite or class for the near future were predominant, things have changed fundamentally over the past few years. More recently, most publications, frequently based on solid empirical surveys, are sceptical towards this thesis or reject it outright, or they provide empirical results pointing in that direction (Bühlmann et al. 2017; Davoine and Ravasi 2013; Dudouet et al. 2012; Hartmann 2009; Hartmann 2015; Heemskerk 2013; MacLean et al. 2014; Pohlmann 2009; Schmid et al. 2015; Schneickert 2015; van Veen and Marsman 2008; van Veen and Elbertsen 2008; Timans 2015; Yoo and Lee 2009). If we want to seriously analyse those processes which might lead to the development of a global corporate elite or transnational capitalist class, we must focus on one aspect, which is the cross-border mobility of elites. Mobility is the crucial precondition for any national or transnational process of elite or class development. Marx already pointed to its role for constituting the bourgeoisie and the working class. It is, he states, the essential precondition for lifting the traditional barriers between individual groups of the population, from which each class then develops. Max Weber’s definition of the social class as the “entirety of those class positions among which change is easily possible a) personally, b) over the generations, and typically happens” (Weber 1972: 177) points in the same direction. Marx and Engels in The German Ideology sketch this process with the example of the early bourgeoisie or “bourgeois class.” By extending contacts and communication with one another as well as through their struggle against the nobility, they say, the citizens of the individual cities “very gradually” became a class. The living conditions they created in common but which at the same time worked against them as an independent external force developed further “from being common conditions to being class conditions,” due to the “connections between the individual cities.” Here Marx goes even further, and his arguments are very similar to what Bourdieu has analysed as the relation between class position and class habitus (as an incorporated class position) when he says: “On the whole, the same conditions, the same contradiction, the same interests had to create the same customs everywhere” (Marx and Engels 1969: 53). Thus, for the development of a transnational class position and the resulting transnational class habitus, a process may be supposed to be necessary, which Bourdieu relates to the national level, described as follows: its members must be confronted with similar, class-typical experiences to a decisively higher degree than those belonging to the other classes (Bourdieu 1990: 59–60). We may suppose that this is hardly possible without a strong degree of cross-border mobility.

The international business elite  33 There are two crucial indicators for empirically assessing the degree of transnational mobility in the case of business elites,1 which are the number of foreigners at the top of the leading multinational companies and the international experience of national top managers. CEOs are particularly suitable because on the one hand they occupy the most powerful positions in their enterprises, on the other hand because, in contrast to external board members, they must actually live in the country where the respective enterprise has its headquarters – for them it is not sufficient to jet in for a couple of meetings a year. In this chapter, empirical results for both indicators will be presented. For this purpose, we will examine all those people who are at the top of one of the leading multinational enterprises in 2015. They are the CEOs of the 1,000 biggest enterprises according to the Forbes Global 2000 List for the year 2015 as well as the CEOs of the 100 biggest German, French, British, US, Chinese and Japanese enterprises at the beginning of 2015. The 1,000 enterprises were investigated according to the Forbes Global 2000 List of 2015, the 100 biggest enterprises of the six countries according to the Forbes List of 2014, with other rankings included for completeness.2 According to Forbes, official registration in a country is decisive for the nationality of an enterprise. With the exception of 14 enterprises registered only for tax purposes in countries like Ireland or Luxembourg, the enterprises are registered in those countries where their actual headquarters, or in the case of binational enterprises, one of them are located. For the degree of internationalization of the business elite the headquarters are essential because this is where all crucial decisions are made. Furthermore, also the 1,041 richest billionaires according to the places up to 1,0003 on the Forbes Billionaires List were analysed for their degree of internationality, because although there are overlaps with the CEOs, there are also considerable differences, and the billionaires also cover the second crucial group of people, which is relevant for the argument of the global elite or international business class or international capitalist class.4

2 The inter- and transnationality of the top business elite A first look at the CEOs of the 1,000 biggest enterprises in the world already makes it obvious that we cannot speak of a real inter- or trans-nationalization5 of the business elite. Of the total of 1002 CEOs,6 only 126 come from foreign countries. However, there are vast differences between individual countries. Switzerland has by far the biggest share of foreigners, with 18 out of the 25 corporate enterprises that count among the 1,000 biggest ones worldwide being led by foreigners. Switzerland’s top business elite is indeed international. The situation is similar in Great Britain, Australia and Ireland, where, with 44, 45 and 60 percent respectively, approximately half of the CEOs of top enterprises come from abroad. Already at a considerable distance, these three countries are followed by a group of three countries (the Netherlands, Canada and Germany) where still 16 to 30 percent of the CEOs come from a foreign country. In all other countries the quota is much

34  Michael Hartmann lower. Of the nine big countries among them, only the US and Brazil show a share of foreigners of more than 5 percent. France and Japan count two foreigners each among their CEOs, and the other five countries (China, India, South Korea, Russia and Spain) have none at all.7 Basically, a true internationalization of the top business elite is found only in three countries.8 In the case of three others we may at least speak of a considerable presence of foreign top managers. For all the others, internationality at the top ranks of the big corporate enterprises is non-existent.9 Moreover, in the case of Great Britain it must be remarked that 10 out of the 22 foreign CEOs head enterprises which are not purely British but binational, such as the British– South African packaging and paper group Mondi or the British-American insurance group AON. While they are headed by a South African or an American, only with reservations can we speak of an internationalization of the top management. This is even truer for Fiat Chrysler Automobiles, which moved to London purely for tax reasons but still operates from its traditional headquarters in Turin and Auburn Hills, Michigan. The same applies to all the six Irish and two Bermudian enterprises, three of the Swiss and two of the Luxembourg companies headed by foreign CEOs. If those foreign CEOs who share the nationality of the companies’ real headquarters are excluded, the proportion of foreign CEOs falls below 10 percent. The account is even more sobering if one leaves out of consideration those foreign CEOs who come from a similar language area and cultural environment. In the case of the English-speaking countries this means other Anglosphere countries; for Germany it is the immediately neighbouring countries of Switzerland, Austria or the Netherlands; in the case of the Scandinavian countries it is other countries of the region; and for the Netherlands it is the Flemish part of Belgium. In East Asia the same holds for the Chinese minorities in countries such as Malaysia or Singapore. If one counts as foreigners only those CEOs who actually come from a different language area or cultural environment, the number of foreigners among CEOs declines drastically. Then no more than 46 out 1,002 are left. Particularly in the Anglosphere it becomes obvious that internationality is there limited to people whose mother tongue is also English and who have also grown up in a culturally similar tradition. In Australia and Canada there is only one CEO whose mother tongue is not English, in the US there are eight, and in Great Britain seven, which there too reduces the proportion of foreigners by two-thirds. The latter also holds for Germany and the Netherlands. Only in Switzerland, with 44 percent, is the share of foreigners still very high even given this restriction. Thus, with the exception of Switzerland, the internationalization of the top management, if we may speak of it at all, happens almost exclusively within the limits set by language and cultural traditions. In this respect, the former British Empire plays the decisive role still today. While it is sobering to look at the internationality of top managers in the world, it is even more so to look at their transnationality. Not even one in four of the national CEOs has spent an uninterrupted period of at least six

The international business elite  35 Table 2.1  Degree of internationality and transnationality of the CEOs of the 1,000 biggest enterprises according to the Forbes List

US Japan China Great Britain France Germany Canada South Korea Switzerland India Hong Kong Australia Netherlands Spain Taiwan Sweden Italy Russia Brazil Ireland Other countries Total

CEOs

Foreigners (in %)

Foreigners coming from a different language area and cultural environment (in %)

Foreign experiences of national CEOs (in %)

306 99 94 50 45 32 32 27 25 25 25 20 17 16 16 15 14 12 10 10 112 1,002

27 (8.8) 2(2.0) 0 (0.0) 22 (44.0) 2 (4.4) 5 (15.6) 9 (28.1) 0 (0.0) 18 (72.0) 0 (0.0) 2 (8.0) 9 (45.0) 5 (29.4) 0 (0.0) 0 (0.0) 2 (13.3) 0 (0.0) 0 (0.0) 1 (10.0) 6 (60.0) 16 (14.3) 126 (12.6)

8 (2.6) 2 (2.0) 0 (0.0) 7 (14.0) 2 (4.4) 2 (6.3) 1 (3.1) 0 (0.0) 11 (44.0) 0 (0.0) 0 (0.0) 0 (0.0) 2 (11.8) 0 (0.0) 0 (0.0) 1 (6.7) 0 (0.0) 0 (0.0) 1 (10.0) 2 (20.0) 7 (6.3) 46 (4.6)

26 (9.3) 30 (30.9) 7 (7.4) 7 (25.0) 15 (34.9) 20 (74.1) 5 (21.7) 8 (29.6) 2 (28.6) 6 (24.0) 9 (39.1) 2 (18.1) 6 (50.0) 3 (18.8) 4 (25.0) 6 (46.2) 8 (57.1) 2 (16.7) 3 (33.3) 0 (0.0) 28 (29.2) 197 (22.5)

Source: the author’s own research

months of his/her educational or professional career in a foreign country. Only in three countries is this minimum demand as regards foreign experience met by a majority of national CEOs. In Germany three out of four, in the Netherlands and Italy at least one out of two CEOs have such experience, in most cases in the course of their professional careers, less often in the course of their studies. In most other countries this is true for only one out of four; in Australia, Russia and Spain it is one out of six or seven, in the US one out of eleven; and in China one out of 14. For the vast majority of national CEOs we cannot identify anything that might be called familiarity with foreign cultures, which holds most of all for the two biggest economies, the US and China. On the whole, there exist two clearly separated groups of countries. In the first one, either a low proportion of CEOs with foreign experience is accompanied by a strong presence of foreigners, as in Australia, Great Britain or most of all Switzerland, or a high proportion of CEOs with foreign experience is associated with a medium degree of internationalization, as in

36  Michael Hartmann Germany and the Netherlands. All in all, there we can speak of an already existing or at least clearly developing international business elite, with, however, the reservation that internationalization is in the vast majority of cases limited to CEOs from the same language area and cultural environment and that furthermore, in the case of Great Britain and the Netherlands, binational enterprises play an important role. In all other countries the situation is completely different. There, a low share of foreigners and a similarly low proportion of national top managers with foreign experience go hand in hand. This holds in particular for the US, Russia and China, where not even every fifth or, in the case of China, not even every tenth CEO either comes from abroad or has lived there for at least six months.

3 The inter- and transnationality of the CEOs of the 100 biggest enterprises in Germany, France, Great Britain, the US, Japan and China The picture of the CEOs of the 1,000 biggest enterprises in the world does not change even if we look exclusively at those six countries which are the homes of most of the leading multinational enterprises, if we extend the circle of enterprises to 100 in each case and look at the development during the past two decades. Again, the top managers of British enterprises show the highest degree of internationalization, followed by their German counterparts, who, on the other hand, include the highest share of national managers with foreign experience. However, in both cases the proportion is clearly lower, which does not really come as a surprise: it is in line with the general expectation that the degree of internationality among top managers grows according to the size of the enterprise. But this holds only for Great Britain and Germany. In the other four countries there are no differences worthy of note, whether we consider the 100 biggest enterprises or, country-specifically, a higher (US) or lower number (France, China and Japan). For all six countries taken together, the figures for their internationality and transnationality, at almost 10 percent and almost 20 percent respectively, are slightly lower than for the same number of CEOs according to the Forbes List.10 Even more telling than the current data, however, is the development over the past two decades, i.e. since the mid-1990s. It shows that in the course of this period there developed three equally sized but completely different types of inter- and/or transnationality of CEOs. In the first group we find German and British top managers, in the second French and US American top managers, and in the third group Japanese and Chinese top managers. In the 100 biggest British enterprises the number of foreigners holding top positions increased almost fivefold between 1995 and 2015, from seven to 33. The situation is similar for the 100 biggest enterprises in Germany. There, the number of foreigners even increased sevenfold in the same period, although starting from a much lower base of only two people in 1995. On the other hand, the share of national top managers with foreign

The international business elite  37 Table 2.2  Degree of internationality of the CEOs of the 100 biggest enterprises in Germany, France, Great Britain, the US, Japan and China (in percent)11

Foreigners

1995 2005 2015

D F GB US  Japan China n = 100 n = 100 n = 100 n = 100 n = 100 n = 100 n = 100 n = 100 n = 102 n = 101

1995 2005 2015 1995 2005 2015

2.0 9.0 13.7 1.0 4.0 5.9

2.0 2.0 4.0 2.0 2.0 3.0

7.0 18.0 33.0 1.0 6.0 15.0

3.0 5.0 7.9 1.0 2.0 4.0

– 1.0 1.0 – 1.0 1.0

– – – – – –

26.3 36.3 46.6

21.4 18.1 26.0

26.9 18.9 23.9

7.2 9.5 15.1

N.A. 34.3 31.3

N.A. 14.0 8.0

Foreigners coming from a foreign language area/cultural environment Natives with at least six 1995 months of foreign 2005 experiences (in 2015 % of national top managers)

Source: Hartmann 1999, 2009 and the author’s own research

experience grew from slightly more than 26 percent to more than 46 percent, whereas among British CEOs there is a slight decline from a comparably high original level. Taken together, however, the enterprises of these two countries are clearly in the lead as regards the inter- and transnationality of their top managers. Already in the two countries forming the second group, France and the US, the situation is quite different again. The top management of these nations is characterized by a process of internationalization which is progressing only slowly and, furthermore, starts out from an extremely low level. In France, between 1995 and 2015, the number of foreigners at the top of big enterprises rose from two to four, and in the US from three to eight, four of whom have dual citizenship. In France, 26 percent of CEOs compared to 21 percent in 1995 can now claim foreign experience; in the US it is slightly more than 15 percent compared to 7 percent in 1995. In sum, when it comes to inter- and transnationality, this represents not more than almost a quarter to almost a third, compared to almost half or even slightly more than half in Great Britain and Germany respectively. If, despite the considerable differences, for the nations considered so far we may state at least a general (although more or less distinct) trend towards an internationalization of the top management, for the two big East Asian countries of China and Japan this is clearly not the case. In this regard, there has indeed been a reverse development in the course of the past decade. First, the number of foreigners is close to zero, and the only foreign CEO, living in Japan, is the Frenchman Christophe Weber, who has been at Takeda since April 2015. The other is the same person as 10 years

38  Michael Hartmann ago, Carlos Ghosn. As the CEO of the French Renault group, he also heads Nissan, since Renault owns this legally independent Japanese car company. Secondly, and this is even more astonishing, in contrast to all other countries there has been a decline in foreign experience. Admittedly, in Japan still almost every third company president can claim a foreign stay (in most cases two to three years and usually in one of the US daughter companies) in the course of his career. However, this is three percentage points lower than in 2005. Among the CEOs of Chinese big corporate enterprises this decline is even clearer, with just 8 percent compared to 14 percent 10 years ago. It is remarkable in this context that, contrary to general expectations, it is not the younger CEOs who look back to most foreign experience but the older cohort of those born in the 1950s. Whereas 12 percent of the latter have spent at least one uninterrupted period of six months abroad, the figure for their younger colleagues is only half that, at 6 percent.

4 The billionaires – an international elite? Now, it might be argued that the true international elite is not the CEOs of big enterprises but the richest individuals of this world. However, even a brief look at this group shows that their degree of inter- and transnationality is no different from that of the CEOs. Of the 1,041 richest individuals in the world, just 90 have a permanent residence outside their home countries. Thus, in contrast to general expectations and assumptions, they are even less internationalized than the CEOs, at least as far as their main places of residence are concerned. Here too the differences between individual countries are astonishing, but the sequence is completely different from that of the CEOs. The highest share of billionaires living abroad is found in Sweden with seven out of 20, followed by France with eight out of 23, Germany with 19 out of 67, Canada with five out of 20, Israel with three out of 11 and Italy with five out of 23. In these countries, one-fifth to more than one-third live permanently abroad. With a few exceptions, British and Swiss billionaires stay in their own countries, like their US, Chinese and Japanese counterparts. It is even more remarkable that today Russian billionaires, who just a few years ago were widely believed to live mostly in London, live in Russia with almost no exception. Only two out of 45 live abroad, which is a surprisingly low proportion. For German, French, Italian and Swedish billionaires, tax advantages may be supposed to be the reason for moving abroad. This assumption is supported by the fact that almost all the Germans in question live in Switzerland and Austria, all the Italians live in Monaco and Switzerland, half of the Frenchmen live in Switzerland, and the Swedes exclusively in Great Britain and Switzerland. As with the CEOs, linguistic, cultural and spatial proximity is essential for the choice of residence, apart from tax issues. The German billionaires are attracted by the German-speaking neighbouring countries of Austria and Switzerland, the Italian billionaires move from

The international business elite  39 Italy to Monaco and the Italian-speaking part of Switzerland, and the billionaires from Commonwealth countries are attracted by Great Britain. The English language also makes Great Britain attractive for all billionaires who, like Russians or Swedes, have no linguistically related countries they might move to. This is particularly true for the metropolis of London, which is the home of every sixth billionaire living abroad.

5 The significance of internationally renowned elite universities Given the comparatively low degree of inter- and transnationality among the CEOs and billionaires, it may be asked whether the prognosis supported most of all by Marceau, that the famous business schools such as INSEAD, LSE or Harvard Business School are hotbeds of an international business elite, is more realistic. In reality, that is not the case. No more than 13 out of the total of nearly 1,300 CEOs have attended INSEAD or LSE, and frequently they come from small countries such as Greece, Norway or Portugal where there are no internationally renowned universities. The situation is different only concerning the famous US business school of Harvard and the French elite business school HEC, where at least about 20 CEOs respectively obtained their MBAs. However, and this is the crucial reservation, in the former case these CEOs – with four exceptions – are exclusively Americans. Thus, they did not attend an international “elite school,” but institutions of elite education which are firmly rooted in the educational system of their home country. The same holds even more for HEC. It has been exclusively attended by French nationals who, in their vast majority, head French enterprises. This is typical for the CEOs from all those countries where there are traditional elite schools. A large proportion of national CEOs graduated there. Thus, 74 – slightly more than a quarter – of the 279 US CEOs graduated from one of the Ivy League universities. In addition, 34 others are from Stanford, MIT or similar elite institutions. Slightly more than twofifths of the 28 British CEOs graduated from Oxford or Cambridge. Among Japanese and French top managers the concentration on a few elite universities is even more distinct. More than half of the Japanese CEOs, 51 out of 98, attended one of the top five, with Todai in first place with no fewer than 23 alumni. With 31 out of 43, almost three-quarters of the national CEOs of French big multi-corporate enterprises graduated from one of the country’s three most renowned grandes écoles, the functional equivalent of the Anglo-Saxon elite universities as regards national elite recruitment – ENA, Polytechnique or HEC. Also those CEOs who occupy top positions in foreign enterprises are often products of the elite educational systems of their home countries. Thus, 11 out of 26 American CEOs working outside the US attended one of the elite US universities, an even higher proportion than in US enterprises. Even six out of nine French CEOs heading non-French enterprises attended one of the French elite institutions. Among the many

40  Michael Hartmann Table 2.3  Elite university degrees of national and (in brackets) all CEOs of the 100 biggest enterprises in France, Great Britain, Japan and the US (in percent)

Top elite universities Other elite universities

1995 2005 2015

F n = 98 (100) n = 98 (100) n = 96 (100)

GB n = 93 (100) n = 82 (100) n = 67 (100)

US n = 97 (100) n = 95 (100) n = 93 (101)

Japan n = 100 n = 99 (100) n = 99 (100)

1995 2005 2015 1995 2005 2015

67.3 (66.0) 52.0 (51.0) 52.1 (50.0) 6.1  (6.0) 12.2 (12.0) 9.4   (9.0)

45.2 (42.0) 31.7 (27.0) 34.3 (23.0) 9.7   (9.0) 9.7   (8.0) 6.0   (4.0)

28.9 (28.0) 23.2 (22.0) 32.3 (29.7) 11.3 (11.0) 27.4 (26.0) 16.1 (14.9)

62.0 52.5 (52.0) 54.5 (54.0) 11.1 (11.0) 12.1 (12.0) 21.2 (21.0)

Source: Hartmann 1999, 2009 and the author’s own research

top managers who would also have been able to study at these elite institutions as foreign students, rarely do we find such graduates. Just 11 attended one of the Ivy League universities, 11 one of the other US elite universities like Stanford or Berkeley, and three Cambridge. The elite universities remain firmly embedded in the systems of elite education of the respective countries. They play hardly any role for the careers of foreigners. The latter frequently attend the universities of their respective home countries, often concentrated at a few renowned institutions, as in South Korea, or widely distributed as in Germany and China. This impression is confirmed if the circle of enterprises is again limited to the 100 biggest ones. The expected effect is observed in all four countries. Concentration at elite universities is greater, the more exclusive the selection of enterprises. However, in France and the US this effect is clearly more striking than in Great Britain, where the widening of the range of enterprises hardly changes the share of the most important elite universities. Of the foreign CEOs, however, just one attended one of the elite universities of his host country. The orientation towards elite institutions in home countries is clearly obvious. There is no sign of an internationalization of courses of education or even of the famous business schools as “hotbeds” of a global business elite. The situation is also not really different if one looks at the development of the past two decades. It is true that the share of the top elite universities in France, Great Britain and Japan has declined, and there is a rise only in the US, but they are still predominant among national CEOs. If, however, one looks at all 100 CEOs (including foreigners), in British enterprises there has been a massive decline of the significance of Oxbridge, from 42 to only 23 percent. If one also takes into consideration five other elite universities (Imperial College, King’s College, LSE, Edinburgh and St. Andrews), the decline is even more drastic, from 51 to 27 percent. In the other three countries on the other hand, the remaining elite institutions12

The international business elite  41 gained in significance between 1995 and 2015; in the case of Japan they compensated for the losses of the top five, in the case of France they at least partly compensated for the losses of the top three. In contrast to the expectations of authors such as Marceau, elite business schools do not play any role in the education of a global or transnational business class. First of all they remain part of the respective national system of elite education and are thus really career-relevant only for national CEOs.

6 Conclusion The analysis provides a clear answer to the initial question of whether there is a global elite or a transnational business or capitalist class. The answer is “no.” In three countries – Australia, Great Britain and most of all Switzerland – we may speak of a real internationalization of the CEOs heading the top enterprises, and for three more – the Netherlands, Canada and Germany – we may speak of a clear trend in this direction. However, in all other countries more than 90 percent of CEOs are national. Overall, no more than one in 10 of the nearly 1,300 CEOs under analysis is a foreigner. Since the foreign experience of most CEOs is very limited – just slightly more than a quarter have spent an uninterrupted period of at least half a year in a foreign country – we cannot speak of a degree of cross-border mobility that would be necessary for the development of a transnational elite or class. Among billionaires the situation is not much different. Contrary to all common assumptions and media reports, more than 90 percent of them live and work in their home countries. Furthermore, the development over the past two decades has not resulted in bringing the different levels of inter- and trans-nationalization closer to each other, but on the contrary, the differences between individual countries have even grown. Among a small group, inter- and transnationalization has made rapid progress; among a second group there has been very slow progress at an extremely low level; and within a third group we even observe a slight decrease. This too speaks clearly against the development of a global elite or international business class. If one looks for explanations for the enormous differences between individual countries, two things are striking. First: if for a given country there are other countries where the same or a similar language is spoken and where there are also similar cultural traditions, the circle of potential candidates for top positions extends much faster beyond the national borders than for countries where this is not the case. This in itself is a reason why in the English-speaking countries – but also in the German-speaking countries or Benelux – there are comparably many foreign CEOs, while in Italy, Russia, Turkey, Brazil, Japan, Indonesia or South Korea there are hardly any. The latter simply lack linguistically and culturally related countries. China illustrates the second crucial influential factor: the role of the state. Its influence in China cannot be overlooked, since although 21 of

42  Michael Hartmann the 100 biggest enterprises are privately owned, the state still controls the majority of the big enterprises. The careers of CEOs run accordingly. One in three have worked in public service for several years in the course of their professional careers. This does not hold only for the older generation who started their careers in the 1970s or early 1980s, but it is true to the same extent for those born after 1960, who usually started their careers from the mid-1980s on, that is almost one decade after the country opened up to the world market. Given the radical changes the Chinese economy has undergone since then, the career pattern proves to be surprisingly stable. The proportion of top CEOs looking back to career posts in state administration (including Party and armed forces) is even higher in private than in state-owned companies. Thus, in China there is even a double connection between top positions at enterprises and the state – a direct and an indirect connection. However, there is another country where state influence due to offering the most promising career paths is even more distinct, and that is France. Among French CEOs, even slightly more than 40 percent have been in public service for longer periods, and in contrast to their Chinese colleagues they almost always occupied high positions in administration and politics. Almost two-thirds of them were in one of the Grands Corps, elite institutions of public administration, and almost another third of them occupied high positions with ministries, in most cases as members of a cabinet ministériel, which is a minister’s closest staff. If, however, state institutions play such an important role for business careers, this poses a grave problem for foreigners. Usually they have only a minimum chance of reaching state positions, even more so for top positions. Thus they are crucially disadvantaged when it comes to competing for top positions in big corporate enterprises. In most other industrial countries this obstacle is almost non-existent. In France, foreigners find it difficult to reach top positions in big enterprises due to the additional fact that usually the road to high positions in state service leads via graduation from one of the state elite universities, most of all ENA and Polytechnique. Those who count among the best there may pass through one of the Grands Corps or a cabinet ministériel. This creates a second obstacle for foreigners which can hardly be overcome, since these universities are mostly closed to them, at least as regards those courses which are crucial for the relevant context. Elite universities in Japan have a similar effect; however, this is not connected to career stages in the state sector but to the model, common for Japanese big multi-corporate enterprises, of purely intra-company ascension. Ninety-seven percent of Japanese CEOs working for the top 100 enterprises have never worked for any other company than the one they are currently heading. They were recruited immediately after graduation from one of the renowned elite universities and have never left the enterprise. For foreigners, this means two problems which can hardly be solved. They must graduate from one of the Japanese elite universities, and then work for a Japanese multi-corporate enterprise for the rest of their lives.

The international business elite  43 For the foreseeable future this means that we may rather assume further diversification than a reduction of the differences between the countries. This is suggested by two aspects. Firstly, in many countries state influence will remain considerable. This holds most of all for those countries where the state acts immediately as the owner of enterprises. However, it also holds for those countries where good contacts to state institutions are important for the business activities of privately owned companies. Finally, with some qualifications, it is also true for those countries, such as France, where the state exerts its influence even more indirectly, by way of stateoriented career patterns. Secondly, in East Asian countries such as Japan and South Korea, the absolute predominance of purely inner-company rise in connection with graduation from one of the national elite universities also guarantees that foreigners will be mostly excluded from the top management. As, furthermore, the political tensions between the old and the new economic powers may also be supposed to increase rather than decrease, as is clearly illustrated by the BRICS countries founding their own development bank or by the Ukraine conflict, we may suppose that a global elite or international business class is far away. Probably, what we will see in the coming two or three decades is a limited degree of internationalization in the Northwest European region, consisting of Great Britain, Germany, the Netherlands, Switzerland and the Scandinavian countries, and parallel also among the Commonwealth countries of Great Britain, Australia and Canada. It may be supposed to still run along the line of related language and cultural areas (with the exception of Switzerland), but it still has a potential of going beyond them in the long run. The top management of the South European, Asian and South American countries, and also of the US and Russia, may be supposed to still be mostly or perhaps exclusively nationally structured. This situation is similar for the richest people in the world. As today, we may suppose that also in the coming decades most billionaires will mostly live in their home countries. This is first of all suggested by two crucial reasons: if, as is the case with the majority of them, they are still actively involved in heading their enterprises, they may not live too far away from them. Furthermore, and this is the second reason, quite obviously in their great majority they appreciate living in a linguistically and culturally familiar environment. Even if they own houses in several countries, they are not internationally freewheeling. This becomes very clear through the choices of those who have left their home countries. Quite obviously they preferred linguistically, culturally and in many cases also spatially close countries.

Notes 1 On the concept of elites, see Hartmann 2007; on German elites in their entirety, Hartmann 2013; and on European elites, Hartmann 2010. 2 This was necessary for France, Great Britain and Germany because in the Forbes Global List 2000 they are represented by fewer than 100 enterprises. Furthermore, for these countries as well as the US information about the biggest

44  Michael Hartmann privately held enterprises has been completed by way of an appropriate Forbes List. 3 As the Forbes List of Billionaires lists sometimes not one but two persons (siblings or married couples), it is not exactly 1,000 persons. 4 The detailed results of the research are published in Hartmann 2016 5 The term “internationality” refers to the proportion of foreigners among CEOs; “transnationality” refers to the share of national CEOs with foreign experience, i.e. having spent at least one uninterrupted period of six months abroad in the course of their educational or professional careers. 6 Three enterprises in the US and Germany have two CEOs. Two enterprises in Germany have the same CEO. 7 In Italy and Spain this does not change even if one extends the circle of enterprises to 30 (Hartmann 2015: 40). 8 Ireland is excluded because the six enterprises with a foreign CEO have their headquarters outside of Ireland. 9 The same applies to the chairpersons. Among them, the proportion of foreigners is in fact even lower (Hartmann 2016, Ch. 3). 10 For Brazil, India and South Korea the degree of inter- and transnationality stays the same even if the circle of enterprises under analysis is extended to 50 and 100 respectively. This is made clear by the studies by Pohlmann (2009) and Schneickert (2015). 11 For China and Japan in 1995 there are only figures concerning the nationalities of CEOs because the relevant study (Hartmann 1999) analysed only the other four countries in their entirety. 12 Apart from the top elite institutions for France, they are the other famous elite schools such as Sciences Po (without subsequently attending ENA) or the École Centrale; for the US they are, apart from the Ivy League universities, the traditionally leading 12 private and state elite universities such as Stanford or Berkeley; and for Japan the remaining top 10 universities.

References Bourdieu, P. 1990. The Logic of Practice. Stanford, CA: Stanford University Press. Bühlmann, F., E. Davoine, and C. Ravasi. 2017. “European Top Management Careers: A Field Analytical Approach.” European Societies 18. doi:10.1080/14616 696.2017.1371314 Carroll, W. K. 2009. “Transnationalists and National Networkers in the Global Corporate Elite.” Global Networks 9(3): 289–314. doi: 10.1111/j.1471-0374.2008.00255.x Carroll, W. K. 2010. The Making of a Transnational Capitalist Class: Corporate Power in the Twenty-First Century. London and New York: Zed Books. Dahrendorf, R. 2000. “Die globale Klasse und die neue Ungleichheit.” Merkur. Deutsche Zeitschrift für europäisches Denken 54: 1057–68. Davoine, E., and C. Ravasi. 2013. “The Relative Stability of National Career Patterns in European Top Management Careers in the Age of Globalization: A Comparative Study in France/Germany/Great Britain and Switzerland.” European Management Journal 31: 152–63. Dudouet, F.-X., E. Gremont, and A. Vion. 2012. “Transnational Business Networks in the Euro-Zone: A Focus on Four Major Stock Exchange Indices.” In G. Murray and J. Scott (eds.), Financial Elites and Transnational Business: Who Rules the World? Cheltenham: Edward Elgar, 124–45. Hartmann, M. 1999. “Auf dem Weg zu einer transnationalen Bourgeoisie?” Leviathan 27: 113–41.

The international business elite  45 Hartmann, M. 2007. The Sociology of Elites. London: Routledge. Hartmann, M. 2009. “Die transnationale Klasse – Mythos oder Realität?” Soziale Welt 60: 285–303. Hartmann, M. 2010. “Elites and Power Structure.” In S. Immerfall and G. Therborn (eds.), Handbook of European Societies. New York: Springer, 291–323. Hartmann, M. 2013. Soziale Ungleichheit – Kein Thema für die Eliten? Frankfurt a. M.: Campus. Hartmann, M. 2015. “Topmanager 2015. Die transnationale Klasse – Mythos oder Realität revisited.” Soziale Welt 66: 37–53. Hartmann, M. 2016. Die globale Wirtschaftselite: Eine Legende. Frankfurt a. M.: Campus. Heemskerk, E. M. 2013. “The Rise of the European Corporate Elite: Evidence From the Network of Interlocking Directorates in 2005 and 2010.” Economy and Society 42: 74–101. Kanther, R. M. 1995. World Class: Thriving Locally in the Global Economy. New York: Simon & Schuster. MacLean, M., C. Harvey, and G. Kling. 2014. “Pathways to Power: Hyper-Agency and the French Corporate Elite.” Organization Studies 35: 825–55. Marceau, J. 1989. A Family Business? The Making of an International Business Elite. Cambridge: Cambridge University Press. Marx, K., and F. Engels. 1969. Die deutsche Ideologie. MEW, Bd. 3. Berlin (Ost): Dietz Verlag. Pijl, K. van der. 1994. The Making of an Atlantic Ruling Class. London: Verso. Pohlmann, Markus. 2009. “Globale ökonomische Eliten – Eine Globalisierungsthese auf dem Prüfstand der Empirie.” Kölner Zeitschrift für Soziologie und Sozialpsychologie 61: 513–34. Robinson, W. I. 2004. A Theory of Global Capitalism. Baltimore, MD: Johns Hopkins University Press. Schmid, S., D. J. Wurster, and T. Dauth. 2015. “Internationalisation of Upper Echelons in Different Institutional Contexts: Top Managers in Germany and the UK.” European Journal of International Management 9: 510–35. Schneickert, C. 2015. Nationale Machtfelder und globalisierte Eliten. Konstanz: UVK. Sklair, L. 2001. The Transnational Capitalist Class. Oxford: Wiley-Blackwell. Timans, R. 2015. “Studying the Dutch Business Elite.” Diss., Erasmus Universiteit Rotterdam. Van Veen, K., and J. Elbertsen. 2008. “Governance Regimes and Nationality Diversity in Corporate Boards: A Comparative Study of Germany, the Netherlands and the United Kingdom.” Corporate Governance: An International Review 16: 386–99. Van Veen, K., and I. Marsman. 2008. “How International Are Executive Boards of European MNCs? Nationality Diversity in 15 European Countries.” European Management Journal 26: 188–98. Weber, M. 1972. Wirtschaft und Gesellschaft. Tübingen: C.H. Mohr. Yoo, T., and S. H. Lee. 2009. “In Search of Social Capital in State-Activist Capitalism: Elite Networks in France and Korea.” Organization Studies 30: 529–54.

3 Degrees of transnationalization The case of the Dutch business elite Rob Timans and Johan Heilbron

1 Introduction Processes of economic globalization are amongst the most widely discussed issues in the social sciences. Although its roots can be traced back to well before the 1980s, “globalization” became a popular term in the late 1980s and early 1990s. It refers to the new and intricate ways in which economic processes span the globe, resulting in increasingly complex connections between national economies. Large, transnationally operating firms are often seen as the main drivers of these processes (Dicken 1996; Petrella 1996; Sklair 2001). In network terms, they are the hubs that connect countries through the trade and financial flows that result from their activities. They are also the dominant agents in the transnational (or global) economic field (Bourdieu 2005: 229). Since large firms have been at the forefront of these changes it stands to reason to expect that the same processes have affected the composition, structure and characteristics of the group of executives – the business elite – that governs these firms. Indeed, some scholars have argued that a transnational capitalist class (TCC) has emerged based on the multinational structures of internationally operating companies. However, detailed work on the composition of executive boards in various countries has revealed that the empirical evidence for the existence of this class is scant at best. In Chapter 2 of this volume, Michael Hartmann shows that in most countries the internationalization of executive boards has not advanced nearly as far as macro-economic indicators of international integration would suggest. Hartmann’s detailed empirical analysis of the cross-border mobility of elites offers a fruitful way to study elite practices in relation to globalization. It goes beyond the often imprecise narrative of globalization and the empirical superficiality of transnational class theory. However, it leaves unanswered the question of how processes of transnationalization affect national contexts. In this chapter, we want to take up this question by analysing elite practices using Bourdieu’s concept of fields. As we will explain below, fields are the context in which the practices of agents can be understood in terms of their position relative to other agents. In our case, we are first interested in the ways processes of internationalization (e.g., the number of CEOs

Degrees of transnationalization  47 of foreign nationality) and transnationalization (e.g., the degree to which CEOs have pursued part of their career abroad) affect the structure of the national field of the (Dutch) business elite. Secondly, we also want to investigate how the structure of this field affects elite strategies. In particular, we are interested in how the business elite position themselves in – and between – the national and transnational fields. We propose to investigate the social capital of the members of the business elite as a manifestation of these strategies. This approach is different from the perspective taken by studies of transnational interlocking directorates (e.g. Carroll and Fennema 2002; Kentor and Jang 2004; Nollert 2005; Carroll 2010; Van Veen and Kratzer 2011; Burris and Staples 2012; Heemskerk 2012). Although these studies have yielded important insights into the transnational practices of business elites, they often proceed on the assumption that the synchronous occurrence of these interlocks is the only relevant structure to assess the transnationality of elites. In a Bourdieusian framework these interactional structures can also be interpreted in a different way. According to Bourdieu (e.g. 2005: 198), these forms of interactions must be understood in terms of the structural positions agents occupy in a field. They are thus better understood as position-takings, or manifestations of strategies, rather than as objective positions (Bourdieu 1993: 34). In this chapter we therefore propose a new way to study the connection between the national and transnational fields in more depth. We present the case of the Netherlands, a small economy which is relatively open to influences from abroad. According to Hartmann (Chapter 2 of this volume), the country occupies a middle position between (large) countries with a low degree of internationalization (such as Germany and France), and a country such as Switzerland that has internationalized the most. The chapter proceeds as follows: In section 2, we will briefly discuss the theory behind the approach and address its methodological implications and the operationalization of the theoretical concepts. In the third section we present the results of our analysis. Section 4 concludes the chapter and offers some recommendations for future research.

2 Theoretical approach and methodology 2.1 Fields In Bourdieu’s sociology, fields are the arenas in which agents compete for the most profitable positions, i.e. those that offer the highest potential rewards in terms of the capital that is most valuable in a specific field. Bourdieu (1986) distinguishes economic, cultural and social capital (as well as symbolic capital) as the main forms of capital that are effective in structuring a field. A specific field relevant for the study of elites is the field of power (Bourdieu 1996), the overarching structure of positions in which the elite of separate, more or less autonomous fields (such as the economic field, the political field and the cultural field) are opposed in their struggle

48  Rob Timans and Johan Heilbron for dominance, i.e. where the battle for the legitimate forms of capital and for the power to determine the rules of the game takes place. It is thus a social space that captures the agents who are dominant in their respective fields (Bourdieu 1996: 264). Scholars have used this concept to study elites in Norway (Hjelbrekke et al. 2007), France (Denord et al. 2011), Switzerland (Mach et al. 2011; Bühlmann et al. 2012, 2013) and Denmark (Ellersgaard et al. 2013). When it comes to modelling the dominant positions in the economic field (i.e., the economic pole of the field of power), researchers have focused predominantly on the CEOs of the largest corporations (Bourdieu and Saint Martin 1978; Mach et al. 2011; Bühlmann et al. 2012, 2013; Ellersgaard et al. 2013). At least until Bourdieu’s (2002) exposé on the international circulation of ideas (originally delivered in a lecture in 1989), fields such as the economic field and the field of power have mainly been understood as national fields. However, it is clear that transnational processes have become increasingly important for understanding the business environment. Therefore, a second level of analysis can be introduced, that of a transnational field (cf. Bourdieu 2005; Kuipers 2011; Mérand 2012; Quak 2012; Sapiro 2013). The transnational economic field can be conceptualized as the border-spanning social space in which agents compete to gain dominant positions on a transnational level. The main agents in this field are transnational corporations (TNCs) competing with one another for these positions. They are also the main vehicles for managers to gain international experience and accumulate what can be called “international capital” (Wagner 1998, 2007) or “cosmopolitan capital” (Bühlmann et al. 2013). Part of this capital can be considered as cultural, referring to the acquired competences (e.g., knowing a language, being able to understand a foreign culture) that come with, and facilitate, a prolonged stay abroad. Another part can be seen as social capital, inasmuch as it is formed by belonging to international networks (see Bühlmann et al. 2013: 215–6). Although the transnational field has become increasingly important in some respects, the studies cited above suggest that national fields are still very relevant. Juxtaposing the transnational field with the national field provides analytical leverage in understanding how processes of transnationalization affect national fields. In this chapter we want to explore the relations between the national field and the transnational field in two ways. The first is to investigate the way international capital affects the structure of the national field. As argued by Wagner (2007) and Bühlmann et al. (2013), international capital can introduce a differentiation within national fields, opposing elites endowed with larger volumes of this capital to elites that are more nationally enshrined. The first research question therefore reads: how does international capital structure the field of the Dutch business elite in relation to other forms of capital? The second way is to examine how transnationalization affects the space of position-taking of elites in the form of the social capital they possess.

Degrees of transnationalization  49 Bourdieu described social capital as “the sum of the resources, actual or virtual, that accrue to an individual or a group by virtue of possessing a durable network of more or less institutionalized relationships of mutual acquaintance and recognition” (Bourdieu and Wacquant 1992: 119). According to Bourdieu (1980), social capital must always be studied in unison with the other forms of capital that are important in a field. Although social capital is a distinct form of capital, irreducible to the other sorts, it is never independent of them: the value of an individual’s social capital depends on the values of the capital holdings of those with whom she has links.1 In other words, the value of your social capital depends on the positions of your alters. In this chapter, we set out to investigate the volume and composition of the social capital of the Dutch business elite in order to determine the way these elite can be differentiated according to this form of capital. We do this by studying how the field of structural positions of the Dutch business elite informs the composition of their social capital, and how the differences in this composition can be understood as a space of position-takings. Our second research question therefore reads: how does the volume and composition of the social capital of the Dutch business elite differentiate among them? 2.2 Methods Bourdieu’s perspective is a fundamentally relational one. In order to answer our research questions it is therefore important to use relational methods that allow us to study the relations among the individuals that we are interested in. To model the national field of the business elite in the Netherlands, we therefore rely on the principles of Geometric Data Analysis (GDA) (Le Roux and Rouanet 2004). We use specific Multiple Correspondence Analysis (spMCA) (Le Roux and Rouanet 2004, 2010; Le Roux 2014) to model this field (cf. Lebaron 2015). The aim is to arrive at a representation of the objective relations among individuals and to uncover the main forms of capital that structure the field of the business elite. Like a regular Multiple Correspondence Analysis (MCA), an spMCA can be used to map individuals according to their (Euclidean) distances. These distances are calculated on the basis of an individuals × variables table. The variables are categorical; the categories are referred to as modalities. The spMCA method makes it possible to exclude some modalities (such as those containing missing data) from the calculation of the distances. We used the SPAD software (version 8.0) to perform the spMCA. To analyse the social capital of the CEOs we first employed the tools of Social Network Analysis (SNA) to study the network formed by the contacts among the CEOs in our sample. We used the ORA software (Carley et al. 2013) to visualize and examine the network. Next, in order to analyse how the business elite differ from one another regarding their social capital, we performed a standard Principle Component Analysis (PCA) on the data

50  Rob Timans and Johan Heilbron on social capital. Since we are mostly dealing with numerical variables in this section, a PCA is the appropriate choice within the framework of GDA (Le Roux and Rouanet 2004: 129). Like MCA and SNA, PCA is a relational method that makes it possible to study the relations among individuals (positioned in a cloud of individuals) by reducing the dimensionality of the data. The orthogonal dimensions are constructed by maximizing the correlation between the variables and each individual dimension. A correlation circle can then be used to visualize the correlation between the variables and the axes and to interpret the clouds of variables and individuals. The PCA was performed using the FactoMineR package (Lê et al. 2008) in R.2 2.3  Data and operationalization Since our interest in this chapter lies with the CEOs of the most important companies in the Netherlands in 2009, we used the following procedure to determine these companies. First, we compiled a list of the 250 largest Dutch industrial and commercial companies in that year by turnover. Next, we employed criteria regarding asset size and the number of employees to weed out companies that did not have a substantive presence in the Netherlands but were incorporated in the country for tax reasons only. To further assess the economic impact of the Dutch subsidiaries of foreign firms, we used additional criteria such as the presence of production facilities to determine whether or not a company should be selected (see Timans 2015: 154ff for a description of the entire procedure). We then employed the same procedure to select financial firms. The result was a list of the 133 most important Dutch firms (113 industrial and commercial firms and 20 financial companies). After determining the CEO for each company, we assembled data on the backgrounds, careers and affiliations of these individuals using a wide range of data sources (Timans 2015: 305). The variables that we employed as active variables in the spMCA are presented in Table 3.1, grouped according to five themes.3 To measure the social capital of the CEOs, we first investigated the links among the individuals in our sample. A link is created when in 2009 two individuals had an overlapping membership in a certain organization in a similar position. The organizations with which the CEOs were affiliated were predominantly firms, economic interest organizations (such as employers’ associations and industry associations), political organizations and committees (such as government advisory committees, task forces and councils), academic organizations (such as universities and research institutes) and cultural organizations (such as concert halls or foundations that award literary prizes). However, since the network analysis only concerns links the CEOs had with one another (the “within group” links), this leaves open the possibility that the CEOs were linked with others outside this group. To investigate

Table 3.1  Active modalities used in the spMCA Theme/variable

Modalities

Demography: cultural capital Father’s occupation Professions Entrepreneur, small business owner Management Manual labour Religion Protestant Catholic Place of birth Randstad* Other large town Small town Rural Patriciate/Nobility Yes No Education: academic capital Secondary school HBS Gymnasium Athenaeum Other University No university Classical university (Amsterdam, Utrecht, Groningen) Confessional university (Free University of Amsterdam, Nijmegen, Tilburg) Technical university (Delft, Wageningen, Eindhoven, Twente) New university (Rotterdam, Maastricht) Fraternity Yes membership No Education: intellectual cultural capital Education No higher education Economics, business Technical, natural sciences Social sciences, humanities Law MBA degree Yes No PhD degree Yes No Career: segments Career (semi) Yes government sector No Number of sector None changes 1 2 or more

Number of active modalities 4

2 4

2

4

5

2

5

2 2 2 3

(Continued)

52  Rob Timans and Johan Heilbron Table 3.1 (Continued) Theme/variable

Modalities

Number of active modalities

Number of directorates held before 2009 Number of years spent abroad before becoming CEO Career: general Number of years before first CEO position

0 1 2 or more Less than 1 year 1–6 years More than 6 years

3

0–9 years 10–19 years 20–31 years More than 31 years 0–1 year(s) 2–8 years 9–25 years More than 25 years Yes No

4

Number of years spent in company before becoming CEO Mention in international Who’s Who

3

4

2

*  The “Randstad” is a metropolitan area in the western part of the Netherlands that consists of the four major cities (Amsterdam, Rotterdam, The Hague and Utrecht) and a number of smaller cities.

this possibility further, it is necessary to broaden the analysis of social capital and go beyond strict network conceptualizations. Based on these considerations, we propose to model the social capital of the CEOs as consisting of three analytically distinct components that could be beneficial to the firm that employs them: (1) Links with peers: group network component of social capital First, there is a “within group” component, made up of the links a CEO has with all other 132 CEOs (his or her peers) at the time of measurement (i.e., 2009). The value of this component is derived from the value of the different forms of capital of alters in the network. In line with Eloire (2014), we calculate this derived value by summing the scores of these alters on a measure of their endowment with different forms of capital. These scores are obtained from the first three principal axes of the MCA of the field of the business elite (i.e., the principal coordinates of the individuals on these axes). This way, three variables were constructed to capture the value of the social capital of the CEOs as measured by the position of their contacts (designated, respectively, SCl1, SCl2 and SCl3; see Appendix 1). (2) Links with others outside of the group network Secondly, the CEOs are connected to other members of the corporate elite (e.g., supervisory directors who are not CEOs of the firms in

Degrees of transnationalization  53 the current sample) as well. Since these individuals are not part of the field as modelled in the MCA, we cannot directly measure this part of their social capital. We have therefore chosen four variables to serve as approximate measures: • Number of directorships held with Dutch firms in 2009, both within and outside of the original sample of 133 firms; • Number of directorships held with non-Dutch firms in 2009; • Number of memberships of Dutch economic interest organizations held in 2009; • Number of memberships of non-Dutch or bilateral economic interest organizations held in 2009. Examples of the former are the European Round Table of Industrialists or the European Chemical Industry Council. An example of the latter is the Dutch-German Chamber of Commerce. (3) Social capital amassed during the career The third and final component of social capital we identify here is historical, and pertains to the diversity of social capital amassed during the career. It can be broken down into at least two parts. First, CEOs can develop durable interactions with others when occupying a similar position at the same time and at the same firm. When they subsequently leave this firm to work for a different employer, these links become connections to “outsiders” and can thus be of potential interest to employers. This comes into play after a switch has been made that establishes ties between contexts (cf. White 2008: 2, 24). A similar mechanism is behind a second potential source of diversity: relationships established with individuals during a prolonged stay abroad. Since it is difficult to measure these relationships directly, we have decided to rely on approximations to capture this component of social capital: • Number of switches between companies during the individual’s career; • Number of different foreign countries in which the individual worked during his or her career.

3 Results A first look at the data reveals that close to 80 percent of the CEOs in our sample are Dutch. In an earlier study of Dutch CEOs (conducted for 1976), Beekenkamp (2002) found that over 92 percent had Dutch nationality (see Table 3.2). Then and in 2009, the second largest group consists of CEOs from other Western or Northern European nations. The relatively large number of Dutch CEOs is at odds with the widespread notions of rampant globalization, confirming Hartmann’s main findings (see ch. 2 this volume). This finding warrants the conclusion that there was a degree of internationalization among the Dutch business elite from 1976 to 2009, but less than could be expected on the basis of the debate about internationalization and globalization.

54  Rob Timans and Johan Heilbron As far as education is concerned, 91.7 percent of CEOs in 2009 had some form of higher education (bachelor level or higher), with the majority of them having a degree in economics, business or a related subject. Engineers formed the second largest group that year. Compared to 1976, the most significant difference is the decline of the importance of a law degree, a fact that has also been demonstrated in the context of Switzerland (Bühlmann et al. 2012: 208). This is an interesting finding, since law can be thought of as probably the most nationally defined discipline. At the top of the business world, law degrees have made room for more studies in more internationally homogeneous disciplines such as engineering, economics and business. In the remainder of this section, we will discuss the analysis of the field of 2009. Next, we will focus on the separate measurement of the social capital of the CEOs in our sample. Finally, we will discuss the composition of this social capital, and how it differentiates between the elites. 3.1  Results of the field analysis The sum of the modified rates (Le Roux 2014: 252) for the first four axes is 70.2 percent (see Table 3.3). For the purpose of this chapter, we have chosen to interpret the first three axes; the sum of the modified rates for these axes is 60.9 percent. Figure 3.1 shows the plane formed by the first two axes (the modalities that are shown have an above-average contribution to the first axis). Table 3.2  Nationality of the 133 CEOs Nationality

Dutch Western and Northern Europe US Other Total

Nationality (1976)

Nationality (2009)

Frequency

Frequency

Percentage

Percentage

230 10

92.4 4.0

107 18

80.5 13.5

4 5 249

1.6 2.0 100

5 3 133

3.8 2.3 100

Table 3.3  Eigenvalues and modified rate of the first five axes of the spMCA Axis

Eigenvalue

Modified rate

Cumulative modified rate

1 2 3 4 5

0.186 0.139 0.131 0.121 0.111

33.9 14.7 12.3 9.3 7.0

33.9 48.6 60.9 70.2 77.2

Degrees of transnationalization  55 Axis 2 Management +

+

0.75

+ + + +

+

+

+

No sector change x No higher education + + Randstad No university + No fraternity

+

+

++

+

+

+

+ + ++

+

+

+

+ +

CEO4: 0–1 year(s)

2 or more Sector Changes

+

+

+

–0.75

1 directorate

Register Yes + + Amsterdam, Groningen

+

+

+ + +

Fraternity Yes +

++ ++

+

CEO4: 9–25 years

0

+

Rural

Professions, civils + Gymnasium

+ +

+

Patr/Nob Gvt. Career

+ +

CEO3: 32 and more years

–1.50 –1.50 –0.75 Educational, cultural capital –

0

PhD x

0.75 1.50 Educational, cultural capital + Axis 1

Figure 3.1 Plane of axes 1 and 2: CEOs of 133 largest Dutch firms (2009). Only the modalities with an above-average contribution to Axis 1 are shown.

Interpretation of the first axis The modalities that have an above-average contribution to the first axis indicate a polarity between study at a classic university, membership in a fraternity, a Gymnasium secondary education, a PhD, and coming from a patriciate/nobility background4 on the positive side of the axis, and, on the opposing side, no higher education and not having attended university. Career-wise, there is an opposition between no sector changes and the fastest career ascension on the left side and more than two sector changes and the longest career path on the right side of the plane. Table A1 in Appendix 2 lists the modalities that contribute more than average to the first axis, arranged according to theme. Concentration ellipses based on a supplementary variable that indicates whether a CEO headed a firm owned by themselves or their family show that these CEOs are mostly located on the left-hand side of the first axis. The first axis therefore seems to capture different volumes of cultural capital obtained through the family and the educational system. On the right-hand

56  Rob Timans and Johan Heilbron side, we find individuals with high amounts of this capital while those with low amounts are located on the left (CEOs who did not complete any form of higher education, such as a higher vocational school or university). In addition, the latter group was associated with a stable career pattern in the sense that it was more likely that these individuals had pursued a career within one economic sector only. The power base of the individuals on this side includes economic capital in the form of a family-owned firm. In contrast, the CEOs at the other end are often “newcomers” to their company, with some having pursued an earlier career in the political field. The CEOs on the left-hand side have a different profile from those on the right-hand side of the axis. They are more indigenous to the economic field in some respects, relying less on cultural capital and more on specific hands-on business experience (the two modalities that indicate the longest stay at the company before becoming CEO are also located on this side). Interpretation of the second axis On the upper side of this axis (see Table A2 in Appendix 2, and Figure 3.2 below) we find the combination of having a father who was a manager himself, fraternity membership, study at a “new” (economics-oriented)

Economic, management competence

Axis 2 Management +

+

Mastricht, Nijenrod Small town + x MBA Fraternity Yes Economic, business ++ x – 19 years CEO3: 10 +

0.75

+ ++ +

+

+

+

0

+

+

+

+ +

++

+

+

+

+

+

+

+ +

+

+ +

+ No Fraternity

–0.75

+

+ +

+

+

+

+

+ +

+

Technical competence

+

+

+

+

+ +

x Technical, naturals

Rural +

+ Delft, Endhoven, Tw

+

Patr/Nob Gvt. Career

+ HBS

CEO4: 26 or more years

CEO3: 32 and more years

–1.50 –1.50

–0.75

0

0.75

PhD x

1.50 Axis 1

Figure 3.2 Plane of axes 1 and 2. Only the modalities with an above-average contribution to Axis 2 are shown.

Degrees of transnationalization  57 university, an MBA degree, economics education and the second-fastest career trajectory. On the lower side we find a technical education, an HBS secondary school5 and a long career trajectory – both in terms of the number of years it took before the first CEO position and the number of years spent in the company before reaching the CEO position. We therefore interpret this axis mainly in terms of careers. It shows an opposition between a career based on an economics/management orientation on the upper side of the axis and a career based on specifically technical competences on the lower side. The modalities located at the top of the plane seem to designate general competences with a greater emphasis on general management capabilities than possession of specialized knowledge. The axis is also related to age: using the supplementary variable Year of birth, it becomes clear that the second axis separates the young (located at the top of the plane) from the old (located at the bottom). The top of the plane also contains most non-Dutch CEOs (not shown). The axis therefore seems to capture a structuring according to an opposition between younger and non-Dutch CEOs with a faster career built on economic and management competences, and older Dutch nationals with long careers built on technical knowledge. Interpretation of the third axis The plane of Axes 2 and 3 is shown in Figure 3.3 below. The third dimension captures the CEOs’ international capital. This can be seen by looking at the “Career: segments” theme in Table A3 in Appendix 2: the modality of the largest number of years abroad is located on the right-hand side of the axis, together with a technical education, an MBA degree, a moderately long stay at the present company, and the longest stay at the present company before becoming CEO. The foreign CEOs are predominantly on this side of the axis, as are the CEOs of the subsidiaries contained in the sample. Together with the more technical/natural science disciplines, the only other modality of the education variable on this side of the axis is economics (albeit with a very low contribution to the axis of 0.193). These two disciplines stand in opposition to the most nationally oriented discipline (law), the social sciences and no higher education. Regarding the theme of different career segments, apart from the number of years spent abroad, the number of previous directorships also seems to be relevant for the interpretation of the axis. To determine the degree to which the number of directorships and nationality have a joint effect on Axes 2 and 3, we have crossed the two supplementary variables of “For(eigner)” (Dutch/Non-Dutch) and “DirOn,” or the number of directorships the CEO held in 2009. Figure 3.4 contains the crossed variable on the axes in the plane of Axes 2 and 3, showing the effect of nationality within the number of directorships held in 2009.6 So, for example, the vector that connects the Dutch with one directorship and the non-Dutch with one directorship shows the effect of nationality, while holding the number of directorships (one in this case) constant.

58  Rob Timans and Johan Heilbron Axis 3 International Capital +

+

Delft, Eindhoven, Tw

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As can be seen, there is a clear main effect of nationality, especially on Axis 3: the mean point of the category of non-Dutch CEOs is in the upper right quadrant, while the mean point of the category of Dutch CEOs is in the lower left quadrant. The main effect of nationality on the position in the plane is (-0.220, -0.332), resulting in a scaled deviation of 0.59 along Axis 2 and 0.92 along Axis 3. Especially the effect on Axis 3 is notable and close to “strong.” The main effect of the number of directorships is similar: increasing the number of directorships means moving towards the left quadrant of the plane. The crossing of the variables reveals that there is also an effect of nationality within the number of directorships: holding the number of directorships constant and moving from the category of non-Dutch CEOs to Dutch CEOs means moving towards the negative side of both axes. The distance increases if the number of directorships is increased: the mean point of the category for foreigners with two or more directorships is further away from the mean point for the Dutch than is the case for the other categories. Holding more directorships for the Dutch CEOs on average means a lower score on the international capital dimension, while holding more directorships for foreign CEOs means moving towards higher scores on the dimension. We interpret this as a strong indication for a qualitative

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Figure 3.4 Vectors displaying the effect of nationality within the number of directorships held in the space of modalities, plane of Axes 2 and 3. Explanation of labels: Dutch_0/Non-Dutch_0: Dutch/Non-Dutch nationals with no directorships in 2009 ; Dutch_1/Non-Dutch_1: Dutch/Non-Dutch nationals with one directorship in 2009 ; Dutch_2 or more/Non-Dutch_2 or more: Dutch/Non-Dutch nationals with two or more directorships in 2009.

difference in the social capital (in the form of directorships) between the Dutch and the foreign CEOs. For Dutch nationals, directorships seem to strengthen their position in the national field, whereas for foreigners they appear to be related to other national fields. Seeking multiple directorships can be interpreted as a national strategy for Dutch CEOs and an international strategy for foreign CEOs in the Netherlands. This can also be seen by noting that the category of Dutch CEOs with no directorships is positioned highest on the axis. Based on our conceptualization of the field of the Dutch business elite in 2009, we can conclude that the interpretation of the first three axes of the MCA solution does indicate that one of the main structuring elements of the field is the possession of international capital. However, this amounts more to a transnationalization of careers than to an internationalization of the business elite. In other words: there were relatively few foreign CEOs

60  Rob Timans and Johan Heilbron in the Netherlands, but the degree to which top managers have pursued a career abroad does hold currency in the national field. Meanwhile, these national economic fields are still important contexts for executives and the firms they run. 3.2  Social capital of the Dutch business elite As explained above, there are indications that foreign CEOs with more international capital also possess a different form of social capital from their (Dutch) counterparts with less international capital. This finding links to the second research question, which is how differences in social capital differentiate the elite. Does this reveal a difference between Dutch and nonDutch CEOs? To investigate this matter, we first constructed the network of the CEOs based on their affiliations in 2009. The resulting bipartite network is depicted in Figure 3.5. It consists of 62 CEOs, 44 organizations and 110 (undirected) links. There is one large connected component in the network and four smaller connected components. Of the 62 CEOs who have links to one another, 10 (16 percent) are foreigners. Of these 10, three (indicated by the larger node size) originate from Belgium, the country that is culturally closest to the Netherlands of all the countries of origin represented in this sample (Hartmann, this

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Figure 3.5 Bipartite network of CEOs and the organizations they were affiliated with in 2009 and that provided a meeting place for the individuals in the network. Foreign CEOs are shown with their label; Belgian CEOs also have a larger node size. Changes have been made to the visualization of the network to increase readability.

Degrees of transnationalization  61 volume). In addition, six of the 10 foreign CEOs who have connections with their peers do so in a “passive” way: they are linked because they are the CEO of a company that has another (Dutch) CEO on the supervisory board of directors. Only four non-Dutch CEOs had a more “active” linking behaviour in this network, and only one of them had multiple links in the network.7 The first two axes of the PCA solution explain about 40 percent of the total variance. The first axis correlates negatively with the value of social capital along Axes 2 (SCl2) and 3 (SCl3) and positively with the value of social capital along Axis 1 (SCl1). The other variables that contribute most to the first axis are the number of domestic directorships and membership of domestic economic interest organizations. The supplementary variable Type of link indicates that the CEOs who are not part of the network tend to be located on the left side of the axis, while the CEOs who are part of the largest connected component in the network are on the right (the linkers who are not part of the largest connected component occupy an in-between position). This axis therefore captures a differentiation within the volume of social capital obtained through the network of the CEOs: CEOs with social capital that is tilted towards positive values on the first MCA-axis (SCl1>0) and/or negative values on MCA-Axes 2 and 3 (SCl2, SCl3 .5), but even large (>1.0) (Le Roux and Rouanet 2010: 59). Tables 1–5, all of them prominent tables, are all located to the right, with table 21 in an extreme position on the axis. As is clear from the figure, a distinct hierarchy of tables is found along Axis 1. The opposition between high and low volumes of economic capital, and between academic and economic capital, is thus also present in the dinner seating. To the left, we find

Figure 5.5 Tables in factorial plane 1–2

106  Johs. Hjellbrekke and Olav Korsnes a cluster of tables with intermediate to high numbers, tables that in the actual dining room are in most cases also located at the fringes, with a large physical distance from tables 3 and 4. Along Axis 2, there is a distinct opposition between tables 8, 14–15 and 22, and tables 1, 10 and once again table 21. But, as outlined above, Axis 2 is not the sociologically most interesting. Figure 5.6 shows the table positions in factorial plane 1–3. Once again, there are several notable distances between the tables. Along Axis 3, for the tables on the left-hand side, the opposition between tables 24 and 20 stands at .80, and on the right-hand side, the opposition between table 21 and tables 15 and 1 stands at >1.0. In short, there are both a discernible economic capital hierarchy and a seniority hierarchy at work in the seating. High volumes of economic capital are opposed to low volumes of economic capital and to academic capital along Axis 1. “New money” is opposed to “old money,” and “outsiders” or “newcomers” to “established” or “insiders” along Axis 3. But to what extent can this result be interpreted as support for the homology thesis, i.e. that the structures and oppositions in the global field of power are also present within this subfield of recognition, consecration and re-consecration?

Figure 5.6 Tables in factorial plane 1–3

A place at what table?   107 In Figure 5.7, the variable on sector and position has been projected onto factorial plane 1–3. The similarity to the results from the analysis of the global field of power is striking. Once again, a tripolar structure is revealed. Along Axis 1, positions in business are opposed to all the other positions. Platforms for the execution of economic power are not only systematically contrasted to the other platforms for power. These power holders are also seated at the same tables at the dinner. There is, however, a notable distance (>.5) between the positions of the public and the private CEOs along the axis. This difference, also found by both Bourdieu and St. Martin (1978) and Hjellbrekke et al. (2007), has often been related both to the former’s relations to the political system and to their higher levels of education. Whereas private CEOs have more often inherited their positions, the positions of the public CEOs will to a higher degree depend on achievement through the educational system and institutions like the Norwegian Business School. Along Axis 3, a well-known opposition in the Norwegian case between academic and political capital is revealed. Yet again, “politics as a vocation”

Figure 5.7 Sectors/positions in factorial plane 1–3

108  Johs. Hjellbrekke and Olav Korsnes stands in opposition to “science as a vocation” (Weber 1922), and power over the economy based on political capital stands in opposition to power based on academic or scientific capital. The structures in the global field of power are thus also found within this subfield. Based on these results, it is tempting to regard the dining field of power as simply a microcosm of the general field of power, and a corroboration of former analysis of the structures of this general field. Structural stability seems to dominate over structural change. However, although it certainly corroborates our previous analyses, the argument that there is a homology between the spaces does not mean that we should expect an exact replication of the structures. And an analysis of the clustering of the attendees may tell us more not only about the specificities of the structures of the dining field of power, but also, to paraphrase Zweigenhaft and Domhoff (2006), about the structural diversity in the power elite more generally.

Dining clusters The subgroups within this elite sample have been identified through ascending hierarchical cluster analysis based on Ward’s minimum variance clustering method (Romesburg 2004). The interpretation of the clusters is based on the principles outlined in Denord et al. (2011). We have retained seven clusters for interpretation. Cluster 1, 10 percent of the attendees (n = 28), is a cluster of private CEOs with intermediate and relatively high volumes of economic capital. Their levels of social capital, measured by the score of their board memberships, is also high. MBAs are overrepresented, as are degrees in business economics. Typical representatives of this cluster are all less visible CEO of private companies. In that sense, it is also a cluster of insiders in private business. Cluster 2, 22 percent of the attendees (n = 59), is a cluster with an overrepresentation of public CEOs with intermediate levels of economic capital, low levels of social capital and with a relatively low degree of visibility in the field. In this cluster, one of the typical representatives is the CEO of the Norwegian Broadcasting Cooperation. Cluster 3, 4 percent (n = 11), is a small cluster of inheritors. Having a father with higher education, who is/was a CEO, was a leader in the public sector, or held a degree in economics or engineering, are all overrepresented. One of the current deputy leaders of the Norwegian Labour Party, Trond Giske, is a typical representative of the cluster. Cluster 4, 5 percent (n = 13), is also a small cluster, in this case mainly of upwardly mobile politicians. Social origins in manual occupations (father’s occ.) or lower service (mother’s occ.) are overrepresented, as are lower and intermediate education and presence in Who’s Who. A typical representative is former Labour Party minister Karl-Erik Schjøtt Pedersen, currently the CEO of Norwegian Oil and Gas, an interest organization for the Norwegian oil and gas industry.

A place at what table?   109 Cluster 5, 9 percent (n = 26), is a cluster of “political outsiders.” The members score consistently low on all forms of capital, and there is an overrepresentation of politicians in the cluster. The then vice-president of the Parliament, Øyvind Korsberg, is the most typical cluster representative. Cluster 6, 42 percent (n = 114), is the largest cluster. Lower income, tax and fortune levels, job positions in the public sector and the central bank, degrees from the University of Oslo, professors and politicians are overrepresented. Given the population analysed, the cluster can be interpreted as a general elite cluster, a group of “Anonymous insiders” and “Éminences grises.” Within this highly selective elite, this is the cluster with no clear profile, and the typical representatives are all little known to the public. Cluster 7, 9 percent (n = 23), is the cluster of CEOs with the highest volumes of economic capital. It is also a cluster of inheritors: having a father who is/was a CEO is overrepresented. The same goes for qualifications from prestigious foreign institutions like INSEAD or Lausanne Business School, presence on Hegnar’s Richest List and the highest volumes of social capital. Two key representatives are the CEO of Choice Hotels, Petter Stordalen, and the owner of the largest chain of supermarkets and grocery stores, Odd Reitan. When projected onto factorial plane 1–3, the degrees of separation between the largest clusters (clusters with n >20) are clear. To a large extent, the results validate our interpretation of the MCA.

Figure 5.8 Clusters in factorial plane 1–3: concentration ellipses

110  Johs. Hjellbrekke and Olav Korsnes First, the separation between clusters 2 and 7, CEOs in public companies and the cluster of economic inheritors, is clear. In between these two, we find cluster 1, the more “ordinary” CEOs. Axis 1 thus describes a clear hierarchy among the CEOs. The axis can therefore be interpreted as a more general economic power axis: it separates the most powerful CEOs, inheritors and politicians from the other attendees. Secondly, Axis 3, the mobility axis, polarizes most strongly in cluster 3, the outsiders, and cluster 6, the general cluster of insiders. Thirdly, the factorial plane confirms the tripolar structure in the space, with cluster 5 (politicians), cluster 6 (overrepresentation of professors) and cluster 7 (the economic elite) in the most extreme positions, and clusters 2 and 3, two clusters which depend upon or have ties to the political system, as intermediate, “negotiating” clusters. Finally, when compared with the general field of power, some forms of cultural capital are clearly overrepresented – in particular those associated with education in social and business economics. The cluster analysis reveals a certain opposition between these two kinds of economic education (cluster 6 vs. clusters 1 and 7), and an internal opposition between MBA and business education, mostly from Norwegian educational institutions, and business education from prestigious foreign institutions (clusters 1 and 7). At the same time cluster 3 – the cluster of inheritors (ellipse not shown) – spans across clusters 1, 7 and 6, indicating a general opposition between own and inherited cultural capital endowments and political capital, which we also find in the general field of power.

Concluding comments The seating at the Norwegian central bank’s annual dinner is public information, and it is perceived by the public as an expression of a hierarchy of power in the Norwegian society. Also for these reasons, we have repeatedly portrayed the central bank’s annual dinner as an arena of consecration and re-consecration. To be among the powerful, one should also be acknowledged by the powerful. But our analysis also shows that, structurally, the dinner is an arena of confirmation of the differences and oppositions in the field of power. The analysis of the symbolic capital hierarchies of the dinner reveals that there is a strong homology between the structuring of these hierarchies and the structuring of the general field of power. Furthermore, the hierarchy of tables, a symbolic expression of statuses within the field of power, turns out also to be a capital hierarchy, linked to the hierarchies within the space of capitals. And by contributing to the consecration and legitimation of the power status of the “insiders,” the dinner may thus also contribute to the consecration and legitimation of the main structures in the general field of power. For the Norwegian power elite, the dinner is also an important annual ritual. Following Bourdieu, social rituals may be understood as rites of

A place at what table?   111 institution which “tend to consecrate or legitimate an arbitrary boundary, by fostering a misrecognition of the arbitrary nature of the limit and encouraging a recognition of it as legitimate” (Bourdieu 1991: 118). The symbolic efficacy of such rites, i.e. “the power they possess to act on reality by acting on its representation” (ibid., 119), will depend on how much they rely on or are able to exploit already existing social inequalities. And this is exactly what the dinner as a social ritual may do, giving a symbolic recognition of both the boundary between “insiders” and “outsiders,” between “the pillars of society” and the rest, and the hierarchical ordering of the various pillars of society. In this way the annual dinner may contribute to the consecration and legitimation of these persons’ status as “insiders” in the Norwegian field of power. But as is often the case, “some animals are more equal than others” (Orwell 1945), and the most prestigious tables are usually the ones with the lowest number. To be moved from one of these tables to a table with a higher number will be perceived by many as no longer being among “the first among equals.” The perceived loss of status and rank may evidently also imply a loss of public prestige. So much so that some guests are reported to have contacted the central bank when they were moved to tables with higher numbers. Boundaries may be arbitrary – but they are hardly ever innocent.

Notes 1 We have chosen to focus on the guest list in 2012, since this could give us the most complete set of information from various public sources, e.g. tax and income registers. 2 According to the ranking in Cukierman (1992), NB is placed along with the central banks of Poland and Yugoslavia as the least independent. See also Venneslan et al. (2011) for a similar assessment, based on a comparison with the central banks of Sweden and UK in the period from 1945 to 1970. Sejersted (2000) also generally agrees with this assessment, and sees the low independence of NB in the context of a national political culture that has been moulded by specific historical experiences. 3 In 2012, the starter was smoked arctic char. 4 Reportedly, scallops are the most popular course, where the queue is also the longest. 5 For other recent applications in elite studies, see Denord et al. 2011 and Bühlmann et al. 2012. 6 The “Oslo school of economics” was established by Ragnar Frisch (1895–1973), who was awarded the Nobel Prize in economics in 1969. Two other economists were central in the consolidation of the school: Trygve Haavelmo (1911–1999), also a Nobel Prize laureate in economics (in 1989), and Leif Johansen (1930– 1982). The school pioneered the development of econometrics and national economic planning models in the post-war period (see Strøm 1998; Sæther et al. 2014). Of the 41 social economists present at NB’s annual dinner, 35 originated from the Department of Social Economics at the University of Oslo, founded in 1932 by Ragnar Frisch. The dominance seems, however, weaker at the doctoral level. Of the 15 with a doctoral degree in economics, seven hold their doctorate from the Oslo department, six from the Norwegian Business School, one from LSE and one from an Ivy League university. The above outlined opposition is thus also present at the highest academic level.

112  Johs. Hjellbrekke and Olav Korsnes

References Bøhn, H. 2012. “Norges Bank 1990–2010. Governance and Structural Reforms.” Working Paper No. 16, Norges Bank’s Bicentenary Project, Norges Bank, Oslo. Bourdieu, P. 1991. Language and Symbolic Power. Cambridge: Polity Press. Bourdieu, P. 1997. Méditations pascaliennes. Paris: Le Seuil. Bourdieu, P. 2015. Sociologie générale. Volume 1. Cours au Collège de France 1981–1983. Paris: Raisons d’agir/Seuil. Bourdieu, P., and M. de Saint-Martin. 1978. “Le patronat.” Actes de la recherche en sciences sociales 20/21: 3–83. Bühlmann, F., T. David, and A. Mach. 2012. “The Swiss Business Elite (1980–2000): How the Changing Composition of the Elite Explains the Decline of the Swiss Company Network.” Economy and Society 41(2): 196–226. Cukierman, A. 1992. Central Bank Strategy, Credibility and Independence. Cambridge, MA: MIT Press. Denord, F., P. Lagneau-Ymonet, and S. Thine. 2011. “Le champ du pouvoir en France.” Actes de la recherche en sciences sociales 5(190): 24–57. Hartmann, M. 2006. The Sociology of Elites. London: Routledge. Hjellbrekke, J., B. Le Roux, O. Korsnes, F. Lebaron, L. Rosenlund, and H. Rouanet. 2007. “The Norwegian Field of Power Anno 2000.” European Societies 9(2): 245–73. Hjellbrekke, J., and O. Korsnes. 2005. “Sosial kapital-strukturar i norske elitar (Social Capital Structures in the Norwegian Elites).” Tidsskrift for samfunnsforskning 46(4): 467–502. Hjellbrekke, J., and O. Korsnes. 2014. “Geometrien i det sosiale rommet” (The Geometry of the Social Space). In O. Korsnes, M. N. Hansen, and J. Hjellbrekke (eds.), Elite og klasse i et egalitært samfunn (Elite and Class in an Egalitarian Society). Oslo: Universitetsforlaget. Hjellbrekke, J., and O. Korsnes. 2016. “Women in the Field of Power.” Sociologica 10(2). doi: 10.2383/85291 Le Roux, B., and H. Rouanet. 2010. Multiple Correspondence Analysis. Vol. 163 in Series Quantitative Applications in the Social Sciences. Thousand Oaks, CA: Sage Publications. Mills, C. Wright. 1956. The Power Elite. Oxford: Oxford University Press. Orwell, G. 1945. Animal Farm: A Fairy Story. London: Secker and Warburg. Pareto, V. 2003 (1901). The Rise and Fall of Elites. New Brunswick, NJ: Transaction Publishers. Romesburg, H. C. 2004. Cluster Analysis for Researchers. North Carolina: LULU Press. Sæther, A., and I. E. Eriksen. 2014. “Ragnar Frisch and the Postwar Norwegian Economy.” Econ Journal Watch 11(1): 46–80. Sejersted, F. 2000. “Norges bank mellom avhengighet og uavhengighet.” In F. Sejersted (ed.), Norsk idyll? Oslo: Pax Forlag. Strøm, S. (ed.). 1998. Econometrics and Economic Theory in the 20th Century: The Ragnar Frisch Centennial Symposium. Cambridge: Cambridge University Press. Urquhart, B. 1987. A Life in Peace and War. New York: Harper & Row. Venneslan, C., R. Trøite, C. Kleivset, and B. Klunde. 2011. “Independence Within Government: A Comparative Perspective on Central Banking in Norway 1945–1970.” Working Paper No. 20, Norges Bank’s Bicentenary Project, Norges Bank, Oslo. Weber, M. 1978 (1922). Economy and Society. Berkeley, CA: University of California Press. Zweigenhaft, R. L., and G. W. Domhoff. 2006. Diversity in the Power Elite: How It Happened, Why It Matters. Lanham, MD: Rowman & Littlefield Publishers.

6 The gendered reproduction of the upper class Maren Toft and Magne Flemmen

The recent increase in economic inequality (see especially Piketty 2014) has thrust questions of class and class reproduction back on the agenda. Moreover, elites or upper classes appear understudied in the social sciences (Savage and Williams 2008), an omission that is particularly glaring in mainstream approaches to class analysis. The now official measures of class adopted by the statistical agencies of the EU and the UK only recognize a fairly broad “salariat” as their category at the top (Rose and Harrison 2010; Rose and Pevalin 2003). But while this calls for bringing the upper class back into the picture, it brings with it the thorny question of how class inequalities relate to, and possibly intersect with, those involving gender. Analyses of class and gender inequalities are often balkanized as distinct endeavours, and too few studies of class mobility systematically unpack the interplay of class and gender in recruitment patterns. In this chapter, we tackle these issues head-on by analysing recruitment to the upper class in Norwegian society as dependent on both class and gender. We ask to what extent, and in what ways, access to the upper class is dependent on the class of origin. Is there further a gendered logic to patterns of upper-class recruitment? Are some forms of capital gendered while others are more neutral? Are there differences in the relative importance of mothers’ and fathers’ class affiliations, or sons’ and daughters’ payoff from parental capital? While many authors would concur that economic, cultural and social resources are crucial to the workings of class structures (Goldthorpe et al. 1987: 99; Khan 2012), it is Bourdieu who defines them as the most “determinant property” of social class (Bourdieu 1984: 106). Following this line of thought, our approach stands apart from the majority of existing classifications of social classes by operationalizing the class structure as twodimensional, shaped by both the total amount of capital and also the composition of this capital, i.e. the relative weight of economic to cultural capital (see also Flemmen et al. 2017). Class analysis has often been charged with gender-blindness, modelling class divisions only on the social positions and trajectories of men (see Dex 1990 for an overview). In this analysis, we seek to seriously consider whether social class reproduction is clearly gendered, as suggested by some earlier

114  Maren Toft and Magne Flemmen findings which indicate that social class origin matters more for women than for men (Flemmen 2009). Similarly, one could expect differences in the significance of fathers’ and mothers’ class, not least considering the increased significance of women’s participation in the labour market over the past decades and the “gendering” of the division of labour. For this reason, we estimate separate models for both father’s and mother’s class and for the upper-class recruitment of both their sons and daughters. We use the unique Norwegian administrative register data with comprehensive information on the entire population, which allows for analysing differences among a privileged minority at the high end of the class structure that so often escape analytical attention in sampled survey data. This chapter is organized as follows. First, we identify two shortcomings in the existing literature on class mobility entailing both an inadequate approach to analysing divisions among the upper class along forms of capital as well as insensitivity towards the interplay between class and gender. Secondly, we present our research design and the variables employed in the empirical analysis. After a results section we offer a discussion of the main findings as well as concluding remarks.

Upper classes and gender While there can be little doubt about the importance of the upper class – and in particular the property-owning capitalists – in the conceptual schemes of class theory, the group has virtually vanished from mainstream approaches to class structure. In Goldthorpe’s approach, now the basis of the official measures of class in the UK and the EU statistical agencies (Rose and Harrison 2010; Rose and Pevalin 2003), proprietors are lumped in with the broad upper-middle class (Goldthorpe 1982; Erikson and Goldthorpe 1993). Erikson and Goldthorpe argue that large-scale proprietors in today’s economic system are organizations and corporations, rather than individuals, and individual capitalists have become so few that they are obsolete in empirical studies based on surveys (Erikson and Goldthorpe 1993; Goldthorpe 1995). But even if large-scale proprietors in contemporary societies tend to be organizations and corporations, these are still owned by individuals, so that a tiny part of the population enjoys superior life chances flowing from property ownership. We conceptualize upper class through the optic of what has been called a Capitals, Assets and Resources (CAR) approach to social class (see Savage et al. 2005). A hallmark of this way of thinking is the recognition that class relations play out in multiple sections, or fields. In particular, we align ourselves with Bourdieu’s rendition of this approach, in which social class divisions are understood in terms of the differential endowment of economic and cultural capital (Bourdieu 1986, 1984). For Bourdieu, skills, competence, possession or kinds of knowledge might come to constitute a form of capital, given the existence of a market or social field in which it is recognized, so that it may come to constitute an

The gendered reproduction of the upper class  115 advantage for its holder. Economic capital refers to anything of pecuniary value – money, property, cars, stocks, etc. Cultural capital refers to cultural competences, which, when it takes on the form of a mastery of valued lifestyles, might operate in an embodied form, or, sanctioned as educational credentials, might operate as the institutionalized form of cultural capital (Bourdieu 1986). The latter becomes a capital largely through its value in labour markets, whereas the former becomes an asset through the positive or negative evaluation it is subject to, not least within the school system (Andersen and Hansen 2012). Even if it is widely recognized that Bourdieu modelled class divisions as involving not simply a hierarchy of resources, but also the crucial, crosscutting division by the composition of capital, this is too often neglected by ostensibly Bourdieusian approaches to class structure, like the recent “new model of social class” (Savage et al. 2013). In this analysis, we deploy a measure of class which systematically integrates this dimension: within the same hierarchical level of the class structure, there is a secondary principle of differentiation in play, distinguishing class fractions by the relative weight of cultural compared with economic capital. Thus, the upper class is composed of the most powerful actors from diverse fields – business, politics, academia, arts, etc. – and in practice measured as the actors richest in economic and cultural capital. This definition takes into account the fieldspecificity of power, and enables the unpacking of the significance of types of capital for social mobility and class reproduction. There are long-standing controversies in sociology over the role of gender as a distinct form of inequality, and how this interacts, or not, with class divisions (see the review in Bottero 2005: 106–25). Clearly, much research on class and stratification has ignored or underestimated the significance of gender, by restricting its analyses to men: by relying on class schemes based only on the occupations of men; by considering social mobility strictly in terms of father-son mobility tables; by reducing gender to the status of control variable; or simply by ignoring the whole issue. However, gender might be of more fundamental significance than this would assume. Crucial disputes about the question of gender have arisen in debates spawned by the influential work of John Goldthorpe (for instance Goldthorpe 1983; Goldthorpe and Payne 1986). In his “conventional approach,” the family is seen as the unit of analysis for class analysis in which the class position of the “breadwinner,” virtually always the man, is decisive. In practice, this means that women are not assigned their own class position, but are rather classified according to their husbands’ class affiliation. This, Goldthorpe argues, can be justified in part due to similar relative mobility rates between men and women, but also because women would subjectively identify with the class affiliation of their husbands, rather than through their own labour market situation. This practice set off a number of responses (see Marshall et al. 1988, Chapter 4, for a review), not least because Goldthorpe appears to be employing a different theoretical

116  Maren Toft and Magne Flemmen rationale for understanding men’s class situation than for women’s (Savage 1997: 319; Savage 1994: 77). It is clear that the class structure itself is gendered because men and women are very unequally distributed within it: not only are there more men at “the top” but women are overrepresented in the class fractions richest in cultural capital. Hence, the gendered structuring of the division of labour – in which women are disproportionately engaged in the lower segments of the class structure – could be read as an important precondition to understanding men’s opportunity structures, and thus for demographic class formation processes. In other words, even if one were to restrict class analysis to men’s life chances, as for instance implied by Goldthorpe, women’s participation in the labour force needs to be added to the equation in order to fully comprehend the structuring of men’s mobility patterns (Marshall et al. 1988: 83–4, 111–12; Savage et al. 1992: 227). In general, however, we are sceptical of assigning women their husband’s class position, and concur with Savage (1994: 77), who proposes to assign every individual their own class position. In the present chapter, we therefore seek to investigate the mobility patterns of both men and women, but scrutinize whether there are gender differences in upper-class mobility chances. Controversies regarding gender and class mobility are not, however, restricted to the debate over whether life chances should be analysed solely on the basis of men. One issue concerns whether or not intergenerational mobility should be restricted to men’s class destinations. There are also disagreements about whether it is sufficient to analyse the class position of the father or whether the mother’s class position should be included. As the division of labour is significantly gendered (see for instance Birkelund 1992; Birkelund et al. 1996), some argue for the necessity of including both parents when trying to understand the transference of privilege over time. This is particularly presented as an important prerequisite to understand daughters’ life chances. For instance, Jonsson et al. (2009: 999) argue that “women’s mobility is complicated to model, because, even more so than men, the process of intergenerational transmission operates through both parents” as “daughters are strongly affected by the work situation of their mothers” (2009: 1013) and especially so the more one seeks to refine the class categories. An interesting result in this respect is provided by Erikson et al. (2012: 216), who find little improvement of fit when estimating mother-daughter associations rather than father-daughter estimates. Other work, however, indicates that the social position of the mother is of increasing importance for understanding contemporary forms of social mobility: a Norwegian study found that, if one only considers the social position of the father, it would seem that social mobility is increasing; but if the social position of the mother is also included, a pattern of stability emerges (Hansen 2010). Accordingly, we opt for a maximum level of gender sensitivity, performing separate analyses for each gender on both sides of the equation. According to Savage and colleagues, the multidimensional structure of social space implies an even closer connection between class and gender.

The gendered reproduction of the upper class  117 The horizontal divisions within the middle class – between cultural and economic capital – are seen as entangled with a gendered logic. By distinguishing between organizational, cultural and property assets they set out to explore whether “some of these assets may be more gender neutral than others” (1992: 142). They find that organizational assets are more “patriarchal” than cultural assets as the former rely on a gendered division of labour, while the latter appears more accessible for women. Investigating both father-daughter and father-son mobility tables, they find that cultural assets are of particular importance for women while daughters seldom follow their fathers into self-employment or managerial positions in comparison with sons. Moreover, for both genders, they detect differences in the transferability of these assets. In particular they find an intergenerational crossing of the “situs divide” between managerial and professional positions: children of managers more often become professionals than managers. A gendered logic in the intergenerational transmission of capital across generations is also evident in Hansen’s (2014) finding that the wealthiest women indeed tend more often to originate from wealthy backgrounds than men, although the trend in Norway is not one of more self-made wealth as proclaimed elsewhere (e.g. Edlund and Kopczuk 2009), but rather an increased influx of inheritors – including growing numbers of male inheritors – and thus a revival of dynastic wealth. Few studies investigate the gendered nature of intergenerational mobility including both a gendered perspective on class origin – including both mother and father’s class affiliations – and class destination, encompassing both sons and daughters. However, by piecing together existing research, we may propose some initial expectations. From existing work, then, we may expect the following: (i) mother’s class affiliation should help explain more of women’s mobility chances than men’s, as capital may be more readily transferred between mothers and daughters due to a gendered division of labour; (ii) capital-specific mobility patterns may inhibit more or less gendered neutral patterns, where especially cultural capital and access into the cultural fraction of the upper class and property inheritance are of comparatively more importance for daughters than for sons.

Data and methods Our research design seeks to capture the complex interplay between class resources and gender dynamics at the apex of the Norwegian class structure. This entails conceptualizing social class divisions in terms of both volume and composition of capital for parents and children alike. This enables us to assess the degree of intergenerational self-recruitment in different classes and fractions. However, given our interest in gender processes, we also condition our analyses on gender for both our estimate of class origin and also class destination. This means our analysis sheds light on the importance of father’s and mother’s class position for the chances of becoming

118  Maren Toft and Magne Flemmen upper class for men and women – while remaining sensitive to any capitalspecificity of such processes by singling out upper-class fractions. For this, we exploit Norwegian administrative register data that provide information on the entire Norwegian population born from 1955 onwards. These data ensure reliable information on income, occupation and education. We can also link individuals to their parents, so that class origins can be determined. These data are unique in that they allow us to study very exclusive social groups which would only be represented by a handful of individuals in ordinary representative surveys. Moreover, the extraordinarily high N lets us run separate analyses even for the most exclusive social groups. We use a novel operationalization of class inspired by the work of Bourdieu. The Oslo Register Data Class Scheme (ORDC) (Hansen et al. 2009) distinguishes classes and class fractions in two dimensions.1 It has, first, a hierarchical dimension of the total amount of capital: it differentiates the highest from the lowest classes. In this hierarchy, class positions reflect the total volume of cultural and economic capital. We thereby identify four main classes: the upper, the upper-middle, the lower-middle and the working class – as well as one category for those employed in the primary sector and one category for people whose livelihood depends on welfare transfers. But cross-cutting this is the capital composition. We differentiate the three highest classes into cultural and economic fractions, as well as balanced fractions, conceptualized as having roughly similar amounts of economic and cultural capital. The scheme is operationalized by classifying occupational codes, but is supplemented with information on income from the tax registers. We use the overall level of income to distinguish between levels in the economic fractions: the upper, the upper-middle and the lower-middle economic class fractions are distinguished by their relative income – as a proxy for their volume of economic capital. Secondly, we use information on capital gains and income from self-employment to identify rentiers or capitalists among respondents without occupational codes and place these in one of the economic class fractions, depending on their level of capital income. The inclusion of rentiers is of particular interest in a gender perspective as daughters are more often shown to be inheritors than sons (Hansen 2014). Thirdly, we use information on welfare transfers to identify those whose level of such transfers exceeds what they earn from other sources, placing them in the category of welfare transfer dependants. Fourthly, we assign those whose income derives mostly from farming, fisheries and forestry to the category “primary sector.” The resulting scheme is shown in Figure 6.1. The outcome variables in the subsequent analyses concern the likelihood of recruitment into the different fractions of the Norwegian upper classes (Figure 6.1). We analyse the complete 1955–1964 cohorts and measure these cohorts’ class positions at age 48,2 i.e. in years 2003–2012. The outcome variable distinguishes between the three upper-class fractions (cultural, balanced and economic), with one category for all other class

The gendered reproduction of the upper class  119

Figure 6.1 The ORDC class scheme with examples of occupations

positions in the ORDC scheme. Multinomial logistic regression models are utilized as the outcome variable includes multiple categories. Models are run separately for father’s and mother’s class. Parental class position is also measured with the ORDC scheme.3 Parental class is measured by using the census data from 1980, when the children’s cohorts were aged between 16 and 25. Parental class in 1970 is reported if class origin is missing in 1980. As our key research interest lies not only in differences between mother’s and father’s transmission of capital but also in a gendered division in the returns to such assets, we include an interaction term between parental class and gender. As each cohort is measured at age 48 – and therefore at different time periods – dummy variables for each year are also included.4 Descriptive statistics for all variables in the analyses are provided in Table 6.1. As seen in Table 6.1, the total number of individuals reaching the upper classes by age 48 is fairly limited among the selected cohorts. About 5 percent reach these top brackets of the class structure, which means that studying access into either class fraction provides insight into structures of privilege of a narrowly defined elite. Only a very few individuals in these cohorts stem from a very privileged background. About 5 percent have fathers from the upper class while fewer than 0.5 percent have mothers

120  Maren Toft and Magne Flemmen Table 6.1  Descriptive statistics Upper class fractions, per cent Culture Balanced Economic Other/lower Total Father’s class, per cent Upper class: culture Upper class: balanced Upper class: economic Upper middle class: culture Upper middle class: balanced Upper middle class: economic Lower middle class: culture Lower middle class: balanced Lower middle class: economic Skilled working class Unskilled working class Farmers, fishery Missing Total Mother’s class, per cent Upper class: culture Upper class: balanced Upper class: economic Upper middle class: culture Upper middle class: balanced Upper middle class: economic Lower middle class: culture Lower middle class: balanced Lower middle class: economic Skilled working class Unskilled working class Farmers, fishery Missing Total Gender, per cent Men Women Total Observations

1.08 2.12 1.74 95.05 100.00 0.81 3.10 1.07 1.71 4.46 5.67 1.30 2.63 3.76 14.98 28.49 6.91 25.11 100.00 0.13 0.29 0.01 0.69 0.96 0.18 2.08 9.23 0.71 10.76 29.64 1.49 43.84 100.00 52.24 47.76 100.00 609,499

from the upper class. Note however, that the issue of missing information is more acute for mother’s class position than father’s – a fact that arguably reflects the gendered nature of female labour market participation in 1980. Hence, the valid percentage for non-missing upper-class membership of fathers is 6.7, but 0.8 for mothers.

The gendered reproduction of the upper class  121

Results In what follows, we will detail the association between social class origin and own position within the upper class. Our analysis is run separately by gender to allow for any gender-specific patterns to emerge. We will examine father’s class first. Table 6.2 shows coefficients (logit) estimating the likelihood of obtaining a position in any of the three upper-class fractions versus any other class position, by the class of the father. Having unskilled working-class fathers is chosen as reference category for the independent variable. We find clear tendencies for the importance of father’s class position; in comparison with sons and daughters of unskilled working-class fathers, the higher the vertical class position (upper class, upper-middle class, lower-middle class, etc.) the higher log-odds of accessing any of the three upper-class fractions. Indeed, this pattern remains fairly persistent for both daughters and sons. However, in addition to this vertical principle in the transmission of advantage, we observe clear tendencies for what we may call capital-specific reproduction, following the horizontal logic of the class scheme. Indeed, there is a marked relationship between the form of capital predominant in the father’s capital profile and the recruitment into a specific upper-class fraction. Having a father from the upper class, rather than from the unskilled working class, is associated with access into the upper class as such. But these chances are further differentiated by class fraction: the likelihood of entering the economic fraction is higher if the father was in that fraction; higher for entering the balanced fraction if the father originated there; and higher for entering the cultural fraction if this was the upper-class fraction of the father. These patterns apply generally (see also Flemmen et al. 2017), but there are significant and important gender differences to consider. Compared with women from unskilled working-class origins, the women entering the class fractions in the economic field and the balanced class fractions have a stronger association with father’s class – regardless of whether the father’s capital was predominantly economic, cultural or of a more balanced kind. In other words, when comparing discrepancies in daughters’ chances of accessing the upper class, father’s resources appear more important than when comparing discrepancies in sons’. Interestingly, however, there seem to be negligible gender differences in the classing of access to the top positions in the cultural field; in the cultural domain there is a clear payoff from having a father with upper-class affiliation and especially so if the father’s class resources were of a cultural kind, but there are no gender differences in the impact of parental class. In other words, the benefit of having privileged origins seems to impact men and women much more uniformly when accessing the cultural upper class compared with accessing other upper-class fractions. Plotting these associations may render the key findings in Table 6.2 easier to understand. In Figure 6.2, we plot the logit coefficients only for the

586,364

Observations

Standard errors in parentheses; *** p